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You have gathered the following information on Stocks A & B. Assuming the stock market is efficient, and the stocks are in equilibrium, which of
You have gathered the following information on Stocks A & B. Assuming the stock market is efficient, and the stocks are in equilibrium, which of the following is correct?
STOCK | A | B |
Required Return | 10% | 12% |
Market Price | $25 | $40 |
Expected Dividend Growth | 7% | 9% |
These two stocks must have the same expected year-end dividend | ||
These two stocks should have the same price | ||
These two stocks should have the same expected return | ||
These two stocks must have the same expected capital gains yield | ||
These two stocks must have the same dividend yield |
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