**Question 523** income and capital returns, real and nominal returns and cash flows, inflation

A low-growth mature stock has an expected nominal total return of **6**% pa and nominal capital return of **2**% pa. Inflation is expected to be **3**% pa.

All of the above are effective **nominal** rates and investors believe that they will stay the same in perpetuity.

What are the stock's expected **real** total, capital and income returns?

The answer choices below are given in the same order.