Stocks a amp b have the following data. the market risk, Ask an Expert

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problem: Stocks A & B have the following data. The market risk premium is 6.0 percent and the risk-free rate is 6.4 percent. Suppose the stock market is efficient and the stocks are in equilibrium, which of the given statements is CORRECT?

	A	B
Beta	1.10	0.90
Constant growth rate	7.00%	7.00%

[A] Stock B's dividend yield equals its expected dividend growth rate.

[B] Stock B must have the higher required return.

[C] Stock B could have the higher expected return.

[D] Stock A must have a higher stock price than Stock B.

[E] Stock A must have a higher dividend yield than Stock B.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M916730

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