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Stocks A and B have the following data. Assuming the stock market is efficient and the stocks are in equilibrium, which of the following statements
Stocks A and B have the following data. Assuming the stock market is efficient and the stocks are in equilibrium, which of the following statements is CORRECT? Since Stock A's growth rate is twice that of Stock B, Stock A's future dividends will always be twice as high as Stock B's. Currently the two stocks have the same price, but over time Stock B's price will pass that of A. Stock A's expected dividend at t = 1 is only half that of Stock B. Stock A has a higher dividend yield than Stock B. The two stocks should not sell at the same price. If their prices are equal, then disequilibrium must exist
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