Stocks a and B Have the Following Data A)The Two Stocks Could Not Be in Equilibrium with the Market

question 51

Multiple Choice

Stocks A and B have the following data.Assuming the stock market is efficient and the stocks are in equilibrium,which of the following statements is CORRECT? $$\begin{array} { l c c } &\text {A}&\text {B}\\\text { Price } & \$ 25 & \$ 40 \\\text { Expected growth } & 7 \% & 9 \% \\\text { Expected return } & 10 \% & 12 \%\end{array}$$

• A)The two stocks could not be in equilibrium with the numbers given in the question.
• B)A's expected dividend is $0.50.
• C)B's expected dividend is $0.75.
• D)A's expected dividend is $0.75 and B's expected dividend is $1.20.
• E)The two stocks should have the same expected dividend.

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