question 8

Question 8 Incorrect A stock is expected to pay a year-end dividend of $2.00, i.e., D1 = $2.00. The dividend is expected to decline at a rate of 5% a year forever (g = -5%). If the company is in equilibrium and its expected and required rate of return is 15%, then which of the following statements is CORRECT? 0.00 points out of 1.00 P Flag question Select one: a. The company's current stock price is $20. b. The company's dividend yield 5 years from now is expected to be 10%. X c. The constant growth model cannot be used because the growth rate is negative. d. The company's expected capital gains yield is 5%. C e. The company's expected stock price at the beginning of next year is $9.50