If Two Firms Have the Same Current Dividend and the Same

question 102

Multiple Choice

If two firms have the same current dividend and the same expected growth rate,their stocks must sell at the same current price or else the market will not be in equilibrium.

• A) false, because the required return could be different
• B) true, because we are using a dividend valuation model
• C) true, if markets are semi-strong form efficient
• D) true, if investors are risk-averse

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Definitions:

Crutches

Mobility aids used to support walking when one is unable to use their legs normally due to injury or disability.

Cane

A handheld aid used to improve balance and reduce stress on the lower body while walking, often employed after injury or for those with mobility issues.

Left Leg Injury

Damage or harm caused to the structures or function of the left leg, potentially affecting mobility or causing pain.

Hemiplegic Patient

An individual who has paralysis on one entire side of their body, often due to a stroke or brain injury.