Stocks a and B Have the Following Data

question 58

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

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Definitions:

Menstrual Bleeding

The monthly shedding of the lining of the uterus (endometrium) when pregnancy does not occur, resulting in bleeding from the vagina.

Sexual Drive

The overall sex drive or desire for sexual activity, influenced by biological, psychological, and social factors.

Menstrual Cycle

Series of changes that occur in sexually mature, nonpregnant women and result in menses. Specifically refers to the uterine cycle but is often used to include both the uterine and ovarian cycles.

Ovulation

The release of an egg (ovum) from the ovary, typically occurring midway through the menstrual cycle.