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The constant growth valuation formula has dividends in the numerator. Dividends are divided by the differerice between the required return and dividend growth rate as

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The constant growth valuation formula has dividends in the numerator. Dividends are divided by the differerice between the required return and dividend growth rate as follows: D1 Po = (r, 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? The capital gains yield on a stock that the investor already owns has an inverse relationship with the firm's expected future stock price. The capital gains yield on a stock that the investor already owns has a direct relationship with the firm's expected future stock price. Explanation: Open Walter Utilities is a dividend-paying company and is expected to pay an annual dividend of $2.25 at the end of the year. Its dividend is expected to grow at a constant rate of 7.00 % per year. If Walter's stock currently trades for $18.00 per share, what is the expected rate of return

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