Using the dividend discount model, the spread between the required rate of return on a stock and the expected growth rate of dividends on that stock is equal to
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A. B. C. D.A
Using the dividend discount model, the price of a stock is equal to D / (k - g), where D is the expected dividend, k is the required rate of return, and g is the expected growth rate of dividends for the stock. Rearranging this equation yields D/P = k - g.