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

question 21

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?
$\begin{array}{lcr}& \mathrm { A } & \mathrm { B } \\\text { Price } & \$ 25 & \$ 40 \\\text { Expected growth } & 7 \% & 9 \% \\\text { Expected return } & 10 \% & 12 \%\end{array}$

• 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.

---

Definitions:

Labour Legislation

Encompasses laws and regulations governing the relationship between employers and employees, including rights and obligations in the workplace.

HR Policies

The formal rules and guidelines that govern the management of human resources in an organization, including hiring, training, assessment, and benefits.

Unions Influence

The impact that labor unions have on negotiations, working conditions, wages, and benefits for their members.

Labour Law

The body of laws, administrative rulings, and precedents which address the legal rights of, and restrictions on, working people and their organizations.