The constant growth valuation formula has dividends in the numerator. Dividends are divided by the difference between the required return and dividend growth rate as follows: fo = D1 (rs - g) Which of the following statements best describes how a change in a firm's stock price would affect a stock's capital gains yield? O The capital gains yield on a stock that the investor already owns has an inverse relationship with the firm's expected future stock price. O The capital gains yield on a stock that the investor already owns has a direct relationship with the firm's expected future stock price. Walter Utilities is a dividend-paying company and is ted to pay annual dividend of $0.85 at the end of the year. Its dividend is expected to grow at a constant rate of 6.00% per year. If Walter's stock currently trades for $13.00 per share, what is the expected rate of return? 06.06% O 12.54% 8.94% O 6.46% Walter's dividend is expected to grow at a constant growth rate of 6.00% per year. What do you expect to happen to Walter's expected dividend yield in the future? It will decrease. It will increase. O It will stay the same