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:

Direct Discrimination

Actions or policies that explicitly treat an individual or group less favorably than others based on prohibited grounds such as race, gender, or age.

Indirect Discrimination

Practices or policies that appear neutral but result in a disproportionate impact on a protected group without a justifiable reason.

Diminishing Marginal Returns

The principle stating that as additional units of a variable resource are added to a fixed resource, the additional output produced by each new unit eventually decreases.

Direct Discrimination

Unfair treatment of individuals based on their specific characteristics, such as race, gender, or age, as directly expressed by actions or policies.