Which of the Following Statements Is CORRECT, Assuming Stocks Are

question 68

Multiple Choice

Which of the following statements is CORRECT, assuming stocks are in equilibrium?

• A) Assume that the required return on a given stock is 13%.If the stock's dividend is growing at a constant rate of 5%, its expected dividend yield is 5% as well.
• B) A stock's dividend yield can never exceed its expected growth rate.
• C) A required condition for one to use the constant growth model is that the stock's expected growth rate exceeds its required rate of return.
• D) Other things held constant, the higher a company's beta coefficient, the lower its required rate of return.
• E) The dividend yield on a constant growth stock must equal its expected total return minus its expected capital gains yield.

---

Definitions:

Glaucoma

A group of eye conditions that damage the optic nerve, essential for vision, often resulting in vision loss and blindness.

Curvature

the degree of curvature or bending in a line or surface, often used in mathematics and physics.

Sleep Apnea

Temporary suspension of breathing while asleep.

Immunological Theories

Theories in science that explain aspects of immunity and immune system functioning, including how the body defends itself against pathogens and how immunological responses can lead to diseases.