The Required Return on a Stock Is Equal to Which

question 9

Multiple Choice

The required return on a stock is equal to which one of the following if the dividend on the stock decreases by 1 percent per year?

• A)(P₀/D₁) - g
• B)(D₁/P₀)/g
• C)Dividend yield + capital gains yield
• D)Dividend yield - capital gains yield
• E)Dividend yield × capital gains yield

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