If Two Constant Growth Stocks Have the Same Price and the Same

question 76

Multiple Choice

If two constant growth stocks have the same price and the same required rate of return,which of the following statements is correct?

• A)If one stock has a higher dividend yield, it will also have a lower dividend growth rate.
• B)The two stocks have the same dividend growth rate.
• C)The two stocks have the same dividend yield.
• D)The stock with the higher dividend yield will have the higher dividend growth rate.

---

Definitions:

Organisational Goals

Objectives that a company or an organization aims to achieve, which guide its internal decision-making processes.

Control Operations

Activities or procedures implemented to monitor and regulate processes and ensure they meet performance standards.

External Users

Individuals or entities outside of an organization who have an interest in the organization's financial information, such as investors and creditors.

Investment Decisions

Choices made by individuals or enterprises regarding where, when, and how much to invest in order to achieve financial goals or maximize returns.