Two constant growth stocks are in equilibrium, have the same price, and have the same required rate of return. Which of the following statements is CORRECT?
The two stocks must have the same dividend per share.
If one stock has a higher dividend yield, it must also have a lower dividend growth rate.
If one stock has a higher dividend yield, it must also have a higher dividend growth rate.
The two stocks must have the same dividend growth rate.
The two stocks must have the same dividend yield
1
Expert's answer
2013-02-25T11:12:49-0500
Two constant growth stocks are in equilibrium, have the same price, and have the same required rate of return.
Right answer is: "The two stocks must have the same dividend", because as the stocks are of constant growth, have the same price, and have the same required rate of return, they have same divident.
Numbers and figures are an essential part of our world, necessary for almost everything we do every day. As important…
APPROVED BY CLIENTS
Finding a professional expert in "partial differential equations" in the advanced level is difficult.
You can find this expert in "Assignmentexpert.com" with confidence.
Exceptional experts! I appreciate your help. God bless you!
Comments
Leave a comment