Stocks A and B have the following data. Assuming the stock market is efficient and the stocks

Question:

A and B have the following data. Assuming the stock market is efficient and the are in equilibrium, which of the following statements is CORRECT?

Required retum Market price 10% 12% $25 $40 Expected growth 7% 9%

These two stocks should have the same price.
These two stocks must have the same dividend yield.
These two stocks should have the same expected return.
These two stocks must have the same expected capital gains yield.
These two stocks must have the same expected year-end dividend.

Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...