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

question 47

Multiple Choice

If a stock's dividend is expected to grow at a constant rate of 5% a year,which of the following statements is CORRECT? The stock is in equilibrium.

• A)The expected return on the stock is 5% a year.
• B)The stock's dividend yield is 5%.
• C)The price of the stock is expected to decline in the future.
• D)The stock's required return must be equal to or less than 5%.
• E)The stock's price one year from now is expected to be 5% above the current price.

---

Definitions:

Plaintiff

The party who initiates a lawsuit before a court against the defendant, seeking a legal remedy or damages.

Disparate-Impact Cases

Legal disputes involving policies or practices that disproportionately affect a particular group, even if unintentional.

Protected Class

Groups of people who are legally protected from discrimination on the basis of characteristics such as race, gender, age, or disability.

Employment Opportunities

Refer to the availability of jobs or positions that individuals can apply for in various sectors or industries.