Stocks a and B Have the Same Price and Are

question 28

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

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Definitions:

Longitudinal

Pertaining to length or the longitudinal axis; in research, it refers to studies conducted over a long period to observe changes in the study subjects.

Transverse

Describes an anatomical section or plane that is perpendicular to the long axis of the body or an organ, dividing it into superior and inferior parts.

Pelvic Cavity

The body cavity located within the pelvis, enclosing parts of the reproductive, digestive, and urinary systems.

Spleen

An organ involved in filtering blood, storing red blood cells, and forming part of the immune system.