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A stock's dividend is expected to grow at a constant rate of 5 percent a year. Which of the following statements is correct? A. a.

A stock's dividend is expected to grow at a constant rate of 5 percent a year. Which of the following statements is correct?

A. a. The expected return on the stock is 5 percent a year.

B. b. The stock's dividend yield is 5 percent.

C. c. The stock's price one year from now is expected to be 5 percent higher.

D. d. Statements a and c are correct.

E. e. All of the statements above are correct.

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