The constant growth valuation formula has dividends in the numeratoc. Dividends are divided by the difference between the required return and dividend growth rate as follows: P^6=40D1 Which of the foliawing statements is true? Increasing dividends will aiways increase the stock price. Increasing dividends may not always increase the stock price, because less earnings may be invested back into the firm and that impedes grawth. Increasing dividents will always decrease the stock price, because the firm is depinting internal funding resources. Walter Utaities is a dividend-pyying company and is expected to pay an annual dividend of $2.25 at the end of the year. Its dividend is expected to orow st a constant rate of 6.50% per year. If Waiter's stock currently trades for $20.00 per share, what is the expected rate of return? 734.38%17.75%660.56461,355.00% Walters dividend is expected to grow at a constant growth rate of 6.50% per year, What do you expect to hoppen to Wayters expected dividend yield in the future? It with decresse, 1t. wil inciease: It wit stay the same