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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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