Stock market is efficient and the stock is in equilibrium

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Reference no: EM13910818

Stock X has the following data. Assuming the stock market is efficient and the stock is in equilibrium, which of the following statements is CORRECT?

Expected dividend, D1 $3.00

Current Price, P0 $50

Expected constant growth rate 6.0%

a. The stock’s required return is 10%.

b. The stock’s expected dividend yield and growth rate are equal.

c. The stock’s expected dividend yield is 5%.

d. The stock’s expected capital gains yield is 5%.

e. The stock’s expected price 10 years from now is $100.00.

Reference no: EM13910818

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