Stocks a and B Have the Following Data A) Stock a Has a Higher Dividend Yield Than Stock

question 237

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?
$\begin{array}{llr}& \mathrm { A } & \mathrm { B } \\\text { Price } & \$ 25 & \$ 25 \\\text { Expected growth (constant) } & 10 \% & 5 \% \\\text { Required return } & 15 \% & 15 \%\end{array}$

• A) stock a has a higher dividend yield than stock b.
• B) currently the two stocks have the same price, but over time stock b's price will pass that of a.
• C) 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.
• D) the two stocks should not sell at the same price. if their prices are equal, then a disequilibrium must exist.
• E) stock a's expected dividend at t = 1 is only half that of stock b.

Comprehend the concept of FICA taxes and their application in payroll.

Identify and calculate federal income tax withholding based on earnings and allowances.

Calculate total taxes withheld from an employee's earnings, including FICA, federal income, and unemployment taxes.

Recognize the structure and purpose of the unemployment insurance program.

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