Suppose that you were calculating the dividend yield on a stock you were considering buying and intended to "back out" the expected capital gains yield as described in the previous section. Using the bid price instead of the ask price (or instead of calculating P0 yourself) as P0 in your calculation would cause:

a. Both the dividend yield and the expected capital gains yield to be too high

b. Both the dividend yield and the expected capital gains yield to be too low

c. The dividend yield to be too high and the expected capital gains yield to be too low

d. The dividend yield to be too low and the expected capital gains yield to be too high