Stocks dividend is expected to grow at constant rate

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If a stock’s dividend is expected to grow at a constant rate of 5% a year, which of the following statements is CORRECT? The stock is in equilibrium.

a. The expected return on the stock is 10% a year.

b. The stock’s dividend yield is 5%.

c. The price of the stock is expected to decline in the future.

d. The stock’s required return must be equal to or less than 5%.

e. The stock’s price one year from now is expected to be below the current price.

Reference no: EM13947599

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