Stocks a and B Have the Following Data

question 30

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.

---

Definitions:

Mathematical Calculations

Mathematical calculations involve performing operations such as addition, subtraction, multiplication, and division to solve problems or analyze data.

Appropriate Statistic

An appropriate statistic refers to the selection of suitable statistical methods or tests that are fit to analyze the given data effectively.

Alternative Hypothesis

In hypothesis testing, the hypothesis that proposes a specific relationship between variables, opposed to the null hypothesis.

Non-directional Null Hypothesis

A type of null hypothesis that states there is no difference or effect, without specifying the direction of the difference or effect.