Constant Growth Stocks Are in Equilibrium, Have the Same Price

question 1

Multiple Choice

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

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Definitions:

Emitted

Released or given off, often used in the context of light, heat, or sound.

Generalization

The process by which the brain applies previous learning to new situations that are similar but not identical.

Instrumental Learning

also known as operant conditioning, is a method of learning that occurs through rewards and punishments for behavior.

Response Strength

The intensity or likelihood of a particular behavioral response, often influenced by past experiences or reinforcement.