Stocks a and B Have the Same Price and Are

question 31

Multiple Choice

Stocks A and B have the same price and are in equilibrium, but Stock A has the higher required rate of return. Which of the following statements is CORRECT?

• A) stock b must have a higher dividend yield than stock a.
• B) stock a must have a higher dividend yield than stock b.
• C) if stock a has a higher dividend yield than stock b, its expected capital gains yield must be lower than stock b's.
• D) stock a must have both a higher dividend yield and a higher capital gains yield than stock b.
• E) if stock a has a lower dividend yield than stock b, its expected capital gains yield must be higher than stock b's.

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Human Intervention

Human intervention is the process of human beings taking action or influencing a process, system, or activity, often to correct or improve its operation or outcome.

Manipulate(s)

To skillfully handle, control, or use objects or information, often with the intent to influence or manage outcomes.

Control(s)

Measures implemented to direct, manage, or regulate actions to ensure that objectives are achieved or certain outcomes are prevented.