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 a direct relationship with the firm$$s expected future stock price.

The capital gains yield on a stock that the investor already owns has an inverse relationship with the firm$$s expected future stock price.

Walter Utilities is a dividend$-$paying company and is expected to pay an annual dividend of $$1\mathrm{.}45$ at the end of the year. Its dividend is expected to grow at a constant rate of $6\mathrm{.}00\%$ per year. If Walter$$s stock currently trades for $$27\mathrm{.}00$ per share, what is the expected rate of return?

$11\mathrm{.}37\%$

$7\mathrm{.}77\%$

$6\mathrm{.}38\%$

$6\mathrm{.}05\%$

Walter$$s dividend is expected to grow at a constant growth rate of $6\mathrm{.}00\%$ per year. What do you expect to happen to Walter$$s expected dividend yield in the future?

It will decrease.

It will increase.

It will stay the same.