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

question 53

Multiple Choice

If a stock's dividend is expected to grow at a constant rate of 5% a year,then 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.

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Definitions:

SELL Sequence

A structured sales approach that stands for Show features, Explain benefits, Lead into advantages, and Let the customer talk, aimed at effective closing.

Demonstration

The process of showing a product to a prospect and letting him or her use it, if possible.

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The practice of ensuring that work environments are safe and healthy, preventing harm to employees.

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Regulations and guidelines set by the Occupational Safety and Health Administration aimed at ensuring safe and healthy working conditions for employees in the United States.