Question 142 DDM, income and capital returns
When using the dividend discount model to price a stock:
### p_{0} = \frac{d_1}{r - g} ###
The growth rate of dividends (g):
(a) Is the stock's required return.
(b) Is the stock's expected total return.
(c) Is the stock's expected dividend return.
(d) Is the stock's expected real yield.
(e) Should be less than the expected GDP growth rate of the country where the company does business.