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

The correct answer is: B. greater than expected yield on dividend.

The expected total rate of return is the sum of the expected dividend yield and the expected capital gains yield. The expected dividend yield is the annual dividend divided by the current stock price. The expected capital gains yield is the expected increase in the stock price over the year, expressed as a percentage of the current stock price.

The expected total rate of return must be greater than the expected dividend yield because the investor expects to make a profit on the investment. The profit comes from both the dividends and the capital gains.

The expected total rate of return can be equal to the expected yield on dividend if the investor expects the stock price to remain unchanged. However, this is unlikely to happen in the long run. The stock price is more likely to increase over time, so the expected total rate of return will be greater than the expected yield on dividend.

The expected total rate of return cannot be less than the expected yield on dividend because the investor would not be making any profit on the investment. The investor would only be receiving the dividends, and there would be no capital gains.