Two Constant Growth Stocks Are in Equilibrium, Have the Same

question 49

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.

Calculate the depreciation expense and carrying amount of assets using different depreciation methods.

Identify and calculate asset and sales turnovers to evaluate the efficiency of a company's asset utilization.

Recognize the costs included in the purchase of land and how these costs affect the carrying value of the asset.

Adjust estimated depreciation expense due to changes in asset life expectancy or residual value.

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