Stock X is expected to pay a dividend of $2.00 at the end of the year. The dividend is expected to grow at a constant rate of 4% a year. The stock currently trades at a price of $35 a share. Assume that the stock is in equilibrium. Which of the following statements is most correct?

a. The required return on the stock is 8%.

b. The stocks expected capital gains yield is 4%.

c. The stocks dividend yield is 7%.

d. Statements a and b are correct.

e. All of the statements above are correct.