The correct answer is: A. The yield earned by investors has been, on average, in conformity with their expectations.
The realized yield approach is a method of estimating the intrinsic value of a stock by looking at the historical yield of the stock. The assumption behind this approach is that the yield earned by investors has been, on average, in conformity with their expectations. This means that if the stock has a historical yield of 5%, then investors have, on average, expected to earn a return of 5% on their investment.
The realized yield approach is a simple and easy-to-use method of estimating the intrinsic value of a stock. However, it is important to note that this approach is based on the assumption that the past is indicative of the future. This assumption may not always be accurate, as the future may be different from the past.
Option B is incorrect because it assumes that the dividends will continue growing at a constant rate forever. This is an unrealistic assumption, as dividends are likely to fluctuate over time.
Option C is incorrect because it assumes that the market price will continue growing at a constant rate forever. This is also an unrealistic assumption, as the market price is likely to fluctuate over time.