Answer to Question #13314 in Finance for martin

Question

stocks a and b have the following data. assuming the stock market is efficient and the stocks are in equilibrium, whic of the following statements is correct?
a, these two stocks should have the same price
b, these two stocks must have the same dividend yield
c, these two stocks should have the same exoected return
d, these two stocks must have the same expected capital gains
e, these two stocks must have the same expected year end dividend

Answer 1

a, these two stocks should have the same price
It is proved because stocks are in equilibrium