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Two firms a and b have identical price earnings ratio. We know that As stock price is trading at $200/share; net income amounts to $20

  1. Two firms a and b have identical price earnings ratio. We know that As stock price is trading at $200/share; net income amounts to $20 billion a year; and the number of shares of A outstanding amounts to 2 billion. On the basis of this information we conclude that Bs earnings yield amounts to:

    a.

    10.0%

    b.

    5.0%

    c.

    4.0%

    d.

    0.5%

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