6. Regarding the return on equities, which of the following statements is most correct?

a. Assume that the required rate of return on a given stock is 12 percent. If the stock's

dividend is growing at a constant rate of 4 percent, its expected dividend yield is 4 percent as

well.

b. The dividend yield on a stock is equal to the expected return less the expected capital gain.

c. A stock's dividend yield can never exceed the expected growth rate.

d. The stock's return will equal the sum of the capital gains yield and the dividend growth.

e. Answers b and c are correct.