Stock X Has a Required Return of 10%, While Stock

question 25

Multiple Choice

Stock X has a required return of 10%, while Stock Y has a required return of 12%. Which of the following statements is correct?

• A) If the market is in equilibrium, and if Stock Y has the LOWER expected dividend yield, then it must have the HIGHER expected growth rate.
• B) If Stock X and Stock Y have the same current dividend and the same expected dividend growth rate, then Stock Y must sell for a higher price.
• C) The stocks must sell for the same price.
• D) Stock Y must have a higher dividend yield than Stock X.

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The quality of being pleasing or appealing to the senses, often used in the context of physical appearance but also can pertain to personality, traits, or objects.

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Societal frameworks where personal achievements and independence are emphasized over collective goals or identities.

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An individual with whom one shares a deep and passionate emotional and physical relationship, often characterized by love and commitment.

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The quality of being reliable and trustworthy, often evaluated in the context of individuals' consistency in actions and behaviors.