Stocks a and B Have the Following Data A)These Two Stocks Must Have the Same Dividend Yield

question 247

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? $$\begin{array} { l c c } & \mathrm { A } & \mathrm { B } \\\text { Required return } & 10 \% & 12 \% \\\text { Market price } & \$ 25 & \$ 40 \\\text { Expected growth } & 7 \% & 9 \%\end{array}$$

• A)These two stocks must have the same dividend yield.
• B)These two stocks should have the same expected return.
• C)These two stocks must have the same expected capital gains yield.
• D)These two stocks must have the same expected year-end dividend.
• E)These two stocks should have the same price.

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