If a stock's dividend is expected to grow at a constant rate of 5 percent a year, which is true:
Its expected return on stock is 5%
The dividend yield is 5%
The stock price one year from now is expected to be 5% higher
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If a stock's dividend is expected to grow at a constant rate of 5 percent a year, which is true:
Its expected return on stock is 5%
The dividend yield is 5%
The stock price one year from now is expected to be 5% higher
One of those is true. Now, review the forum's Homework Help rules, and let us know where you're unsure of your answer. We'll be glad to help you out.
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