Two Constant Growth Stocks Are in Equilibrium,have the Same Price,and

question 43

Multiple Choice

Two constant growth stocks are in equilibrium,have the same price,and have the same required rate of return.Which of the following statements is CORRECT?

• A)The two stocks must have the same dividend per share.
• B)If one stock has a higher dividend yield, it must also have a lower dividend growth rate.
• C)If one stock has a higher dividend yield, it must also have a higher dividend growth rate.
• D)The two stocks must have the same dividend growth rate.
• E)The two stocks must have the same dividend yield.

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Definitions:

CAM

Crassulacean Acid Metabolism, a photosynthetic adaptation in some plants allowing them to conserve water by fixing CO2 at night.

Plants

Multicellular, primarily photosynthetic organisms of the kingdom Plantae, which play a crucial role in the Earth's ecosystems and human agriculture.

Carbon Fixation

The process by which inorganic carbon is converted into organic compounds by living organisms, crucial in the earth's carbon cycle.

Plant Growth

The increase in size or number of cells of plants, influenced by factors such as light, water, nutrients, and genetic characteristics.