Question
Stock A has a required return of 6.5%, while Stock B has a required return of 8%. Which of the following statements is CORRECT? If
Stock A has a required return of 6.5%, while Stock B has a required return of 8%. Which of the following statements is CORRECT?
If the market is in equilibrium, and if Stock B has the lower expected dividend yield, then it must have the higher expected growth rate
If Stock B and Stock A have the same dividend yield, then Stock B must have a lower expected capital gains yield than Stock A
If Stock A and Stock B have the same current dividend and the same expected dividend growth rate, then Stock B must sell for a higher price
Stock B must have a higher dividend yield than Stock A.
The stocks must sell for the same price
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