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Stocks P and Q have the following data. Assuming the stock market is efficient and the stocks are in equilibrium, which of the following statements
Stocks P and Q have the following data. Assuming the stock market is efficient and the stocks are in equilibrium, which of the following statements is CORRECT?
| P | Q |
Price | $30 | $30 |
Expected growth rate (constant) | 4% | 8% |
Required return | 12% | 12% |
Group of answer choices
Stock P's expected dividend at t = 1 is only half that of Stock Q.
Since Stock Qs growth rate is twice that of Stock P, Stock Qs future dividends will always be twice as high as Stock Ps.
Stock P has a higher dividend yield than Stock Q.
Stock P will have a higher price at t=1 than Stock Q.
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