Stocks a and B Have the Same Required Return and the Same

question 47

Multiple Choice

Stocks A and B have the same required return and the same price,$25.Stock A's dividend is expected to grow at a constant rate of 10% per year,while Stock B's dividend is expected to grow at a constant rate of 5% per year.Which of the following statements is correct?

• A)Stock A's expected dividend at t = 1 is only half that of Stock B.
• B)Stock A has a higher dividend yield than Stock B.
• C)Currently the two stocks have the same price, but over time Stock B's price passes that of Stock A.
• D)Since Stock A's growth rate is twice that of Stock B, Stock A's future dividends will always be twice as high as Stock B's.

Identify different approaches to managing problems, including the roles of problem solvers, avoiders, and seekers.

Distinguish between systematic and intuitive thinking styles and their application in uncertain situations.

Comprehend the concept of strategic opportunism and its importance for long-term and short-term organizational goals.

Understand the difference between structured and unstructured problems and their corresponding decision-making processes.

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Definitions:

Gamma-Aminobutyric Acid

A neurotransmitter in the central nervous system that plays a key role in reducing neuronal excitability throughout the nervous system.

Emotional Responses

Emotional responses are reactions characterized by specific feelings, physical effects, and thoughts in response to stimuli or situations.

Anxiety

A sensation of apprehension, anxiety, or discomfort, often regarding a forthcoming event or an unpredictable result.

Norepinephrine

A neurotransmitter and hormone involved in the body's fight or flight response, affecting heart rate, blood pressure, and glucose levels.