Stocks a and B Have the Same Price and Are

question 73

Multiple Choice

Stocks A and B have the same price and are in equilibrium,but Stock A has the higher required rate of return.Which of the following statements is CORRECT?

• A)If Stock A has a lower dividend yield than Stock B, its expected capital gains yield must be higher than Stock B's.
• B)Stock B must have a higher dividend yield than Stock A.
• C)Stock A must have a higher dividend yield than Stock B.
• D)If Stock A has a higher dividend yield than Stock B, its expected capital gains yield must be lower than Stock B's.
• E)Stock A must have both a higher dividend yield and a higher capital gains yield than Stock B.

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Definitions:

Positive Emotions

Feelings that are generally beneficial to psychological health and well-being, such as happiness, joy, and love.

Emotional Display Rule

Unstated cultural guidelines for acceptable emotions and emotional expression that are communicated to children via parents’ emotional behavior, expressions, and socialization.

Difficult Temperament

A personality trait characterized by high levels of irritability, difficulty in adapting to change, and intense emotional reactions.

Irritable

Experiencing or showing a tendency to be easily annoyed or made angry.