Stocks a and B Have the Following Data

question 29

Multiple Choice

Stocks A and B have the following data.The market risk premium is 6.0% and the risk-free rate is 6.4%.Assuming the stock market is efficient and the stocks are in equilibrium,which of the following statements is CORRECT? ​

• A)Stock A must have a higher stock price than Stock B.
• B)Stock A must have a higher dividend yield than Stock B.
• C)Stock B's dividend yield equals its expected dividend growth rate.
• D)Stock B must have the higher required return.
• E)Stock B could have the higher expected return.

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