Stocks a and B Have the Following Data

question 22

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 should have the same expected dividend.
• B) The two stocks could not be in equilibrium with the numbers given in the question.
• C) A's expected dividend is $0.50.
• D) B's expected dividend is $0.75.
• E) A's expected dividend is $0.75 and B's expected dividend is $1.20.

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Definitions:

Dirty Price

The price of a bond including accrued interest, also known as the full or invoice price. This is the price the buyer actually pays.

Clean Price

The price of a bond excluding any accrued interest; the price that is typically quoted in the bond market.

Quoted Price

The last price at which a security or commodity was traded and is publicly available.

Par Value

The face value of a bond or stock as stated by the issuer, which has implications for interest calculations or dividends.