Stocks a and B Have the Same Price and Are

question 12

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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Definitions:

Culture and Sensitivity

A laboratory test that involves growing bacteria or other microorganisms from a sample to identify the cause of an infection and determine which antibiotics will effectively treat it.

Acid-Fast Stain

A staining procedure for identifying bacteria that have a waxy cell wall.

Antibiotics

Medicinal substances used to kill or inhibit the growth of bacteria, crucial for treating bacterial infections.

Facultative Bacteria

Bacteria that can switch between aerobic and anaerobic metabolism depending on oxygen availability.