A Stock's Dividend Is Expected to Grow at a Constant

question 9

Multiple Choice

A stock's dividend is expected to grow at a constant rate of 5 percent a year. Which of the following statements is most correct?

• A) The expected return on the stock is 5 percent a year.
• B) The stock's dividend yield is 5 percent.
• C) The stock's price one year from now is expected to be 5 percent higher.
• D) Statements a and c are correct.
• E) All of the statements above are correct.

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Definitions:

Unconscious Processes

Mental processes that occur without awareness or intention, influencing thoughts, feelings, and behaviors.

The Mind

The essence of consciousness and thought, comprising cognitive functions such as perception, memory, and judgment, which enable understanding and interaction with the world.

Dreams

Experiences of imagined images, sounds, or other sensations during sleep, often representing subconscious desires or fears.

Animal Learning

The process through which animals acquire new behaviors or knowledge as a result of experiences.