Constant growth rate is 7.2% and an expected rate of return is 12.5% then expected dividend yield will be

The correct answer is A. 5.30%.

The dividend yield is the annual dividend per share divided by the current market price per share. The expected dividend yield is the expected annual dividend per share divided by the current market price per share.

The constant growth rate is the rate at which the company’s dividends are expected to grow in the future. The expected rate of return is the rate of return that investors expect to earn on the stock.

The expected dividend yield can be calculated using the following formula:

Expected dividend yield = Expected annual dividend per share / Current market price per share

In this case, the expected annual dividend per share is $0.53 and the current market price per share is $10. Therefore, the expected dividend yield is 5.30%.

Option B is incorrect because the expected dividend yield cannot be greater than the expected rate of return.

Option C is incorrect because the expected dividend yield cannot be negative.

Option D is incorrect because the expected dividend yield is not equal to the constant growth rate.