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qwertybio qwertybio
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8 months ago
Stock A has a beta of 0.8 and Stock B’s beta is 1.2. The market risk premium is 8%, and the risk-free rate is 5.5%. Both stocks have a constant dividend growth rate of 9%. If the market is in equilibrium, which of the following statements is correct?


▸

Stock A must have a lower stock price than Stock B.



▸

Stock B could have the lower expected return. 



▸

Stock B must have the lower required return.



▸

Stock A must have a lower dividend yield than Stock B.

Textbook 
Financial Management: Theory and Practice

Financial Management: Theory and Practice


Edition: 4th
Authors:
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patriciakim08patriciakim08
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8 months ago
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qwertybio Author
wrote...

8 months ago
Good timing, thanks!
paulinaibarra98
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Yesterday
I appreciate what you did here, answered it right Smiling Face with Open Mouth
karamsidhu1
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2 hours ago
Brilliant ツ
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