Stocks A and B have the following data. Assuming the Gordon Growth model holds and the market price equals to the intrinsic value, which of the following statements is CORRECT?

A B

Required return 11%. 15%

Market price $25 $40

Expected growth 6% 10%

A. These two stocks should have the same market price.

B. These two stocks should have the same required rate of return.

C. These two stocks should have the same dividend payment at the year end.

D. These two stocks must have the same ratio of expected year-end dividend to price