77. Suppose your calculations tell you that the market expects a growth rate of 5% for a particular companys earnings and that the discount rate applied to the stocks cash flows is 8%. Your, however, believe its earnings will grow by at least 6% per year over the next few years (and then 5%). If you purchase the stock and hold it for a year, should your calculations and expectations prove correct, your ROR will be:

1. below 5%
2. between 5% and 6%
3. between 6% and 8%
4. above 8%
5. cannot say without knowledge of the payout ratio, as dividends form part of ROR

D

I KNOW the answer is D but can someone please describe why that's the answer