Question: Common stock concepts . Stock A has a required return of 1 0 . 0 0 % , while Stock B has a required return
Common stock concepts
Stock A has a required return of while Stock B has a required return of Which of the following statements is CORRECT?
a The stocks must sell for the same price.
bIf the market is in equilibrium, and if Stock A has the lower expected dividend yield, then it must have the higher expected growth rate.
cIf Stock A and Stock B have the same dividend yield, then Stock A must have a lower expected capital gains yield than Stock B
dIf Stock A and Stock B have the same current dividend and the same expected dividend growth rate, then Stock A must sell for a higher price.
eStock A must have a higher dividend yield than Stock B
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