Stocks a and B Have the Same Price and Are

question 12

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

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Definitions:

Glia Cells

Non-neuronal cells in the central and peripheral nervous systems that do not produce electrical impulses but are responsible for support and maintenance of neural cells.

Hemispheres

The two halves of the brain (left and right), each responsible for different functions and cognitive processes.

Left-Brained

The notion that people who are "left-brained" tend to be more logical, analytical, and objective in their thought processes.

Right-Brained

A popularized concept suggesting that the right hemisphere of the brain is more involved in creative and intuitive processes.