Stocks a and B Have the Following Data

question 68

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?

• 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.

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Definitions:

Writ of Certiorari

An order issued by a higher court to a lower court to transfer the records of a specific case for review.

Administrative Law

The rules and regulations governing the function and powers of the executive branch of government.

Judicial Review

Power held by the courts to review decisions made by administrative decision makers.

Statement of Claim

A legal document filed in court outlining the plaintiff's claims against the defendant and the basis for those claims.