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
B
Required return10%
12%
Market price$25
$40
Expected growth7%
9%

A. These two stocks must have the same dividend yield.
B. These two stocks should have the same expected return.
C. These two stocks must have the same expected capital gains yield.
D. These two stocks must have the same expected year-end dividend.
E. These two stocks should have the same price.


Answer: A

Business

You might also like to view...

Which one of the following is not a decision the auditor makes when using attribute sampling?

a. Sample size. b. Selection of items included in the sample. c. Evaluation of sample information. d. Whether to document all phases.

Business

What are informal communication channels? Explain two types of informal channels and the aspects of each that are useful for managers to understand.   

What will be an ideal response?

Business

When marketers at P&G selected Generation Y, a demographic that includes college students, as an untapped group of potential customers for their Febreze line of products, they were executing which of the following?

A) market segmenting B) undifferentiated targeting C) differentiation D) targeting E) positioning

Business

________ combine an economy supermarket and a discount store

A) Variety stores B) Category killers C) Superstores D) Off-price retailers E) Convenience stores

Business