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:

Multibranding

A marketing strategy in which a company offers multiple brands within the same product category, each with a unique identity to target different market segments.

Mixed Branding

A marketing strategy where a company sells the same product under different brand names to different market segments.

Generic Branding

A marketing strategy that focuses on promoting the product category rather than a specific brand, often to emphasize value or cost-effectiveness.

Family Branding

A marketing strategy that involves selling several related products under one single brand name.