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Homework answers / question archive / Stocks A and B have the following data
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 |
|
| Price |
$25 |
$40 |
| Expected growth |
8% |
9% |
| Expected return |
10% |
12% |
| a. |
A's expected dividend is $0.75 and B's expected dividend is $1.20. |
|
| b. |
A's expected dividend is $0.50. |
|
| c. |
The two stocks could not be in equilibrium with the numbers given in the question. |
|
| d. |
B's expected dividend is $0.75. |
|
| e. |
The two stocks should have the same expected dividend. |
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