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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?

A

B

Price

$25

$40

Expected growth

7%

9%

Expected return

10%

12%

a.

These two stocks must have the same expected capital gains yield.

b.

The two stocks could not be in equilibrium with the numbers given in the question.

c.

The two stocks should have the same expected dividend.

d.

These two stocks should have the same expected return.

e.

These two stocks must have the same dividend yield.

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