In expected rate of return for constant growth, an expected dividend yield must be

functional decreasing
constant
continuously growing
functional increasing

The correct answer is: B. constant

The expected dividend yield is the dividend per share divided by the current stock price. In constant growth, the dividend per share is expected to grow at a constant rate. This means that the expected dividend yield will also be constant.

Option A is incorrect because the expected dividend yield cannot be decreasing. If the expected dividend yield is decreasing, then the stock price must be increasing at a faster rate than the dividend per share. This is not possible in constant growth, because the dividend per share is expected to grow at a constant rate.

Option C is incorrect because the expected dividend yield cannot be continuously growing. If the expected dividend yield is continuously growing, then the stock price must be increasing at an ever-increasing rate. This is not possible in constant growth, because the dividend per share is expected to grow at a constant rate.

Option D is incorrect because the expected dividend yield cannot be functionally increasing. If the expected dividend yield is functionally increasing, then the stock price must be increasing at a faster rate than the dividend per share. This is not possible in constant growth, because the dividend per share is expected to grow at a constant rate.

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