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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?
| Stock A | Stock B |
Required return | 12% | 15% |
Market price | $30 | $45 |
Expected constant growth rate of dividends | 8% | 8% |
These two stocks should have the same price. | ||
These two stocks must have the same dividend yield. | ||
These two stocks should have the same expected return. | ||
These two stocks must have the same expected capital gains yield. | ||
These two stocks must have the same expected year-end dividend. |
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