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A stock pays annual dividends. It just paid a dividend of $6. The growth rate in the dividend is 2% pa. You estimate that the
A stock pays annual dividends. It just paid a dividend of $6. The growth rate in the dividend is 2% pa. You estimate that the stock's required return is 10% pa. Both the discount rate and growth rate are given as effective annual rates. Which of the following statements is NOT correct? O a. The share price at time t=0 is $75.00 o b. The dividend at time t=3 will be $6.3672 O c. Total return of the stock is equal to the dividend yield plus the capital return. O d. The long-term capital return of the stock is 2% O e. Total return of the stock is equal to the company's long term cost of equity
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