Stocks a and B Have the Following Data

question 13

Multiple Choice

Stocks A and B have the following data. The market risk premium is 6.0% and the risk-free rate is 6.4%. Assuming the stock market is efficient and the stocks are in equilibrium, which of the following statements is CORRECT?

• A) Stock A must have a higher stock price than Stock B.
• B) Stock A must have a higher dividend yield than Stock B.
• C) Stock B's dividend yield equals its expected dividend growth rate.
• D) Stock B must have the higher required return.
• E) Stock B could have the higher expected return.

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Definitions:

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Elections held within the Confederate States of America during the Civil War to elect representatives to their Congress, reflecting the political dynamics and nationalism of the Confederacy.

Public Confidence

refers to the trust and belief the general public has in the ability of an organization, institution, or government to perform its duties effectively and ethically.

Jefferson Davis

The President of the Confederate States of America during the American Civil War, known for his leadership of the Confederacy and subsequent capture by Union forces in 1865.

Union Control

The governance or influence exerted by labor unions over workplace conditions, wages, and employment policies.