Which of the Following Statements Is CORRECT,assuming Stocks Are in Equilibrium

question 82

Multiple Choice

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

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

---

Definitions:

Adolescents

Adolescents are individuals in the transitional stage of physical and psychological development that occurs between childhood and adulthood, typically between ages 10 to 19.

Cause Of Death

The immediate reason or ailment leading to the cessation of life in an individual.

Accidents

Unforeseen and unplanned events or incidents that result in damage or injury.

Middle Adulthood

A stage of life typically considered to occur approximately between the ages of 40 to 65, characterized by stability, maturity, and increased responsibility.