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Stocks A and B have the same required return and the same expected

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Stocks A and B have the same required return and the same expected year-end dividend (D1). Stock A's dividend is expected to grow at a constant rate of 10% per year, while Stock B's dividend is expected to grow at a constant rate of 5% per year. Which of the following statements is CORRECT?
The two stocks should sell at the same price.
stock A has a higher dividend yield than Stock B.
Currently Stock B has a higher price, but over time Stock A will eventually have a higher price.
Since Stock A's growth rate is twice Stock B's growth rate, Stock A's future dividends will be twice as high as Stock B's.
Stock A has a lower dividend yield than Stock B.

Companies can issue different classes of common stock. Which of the following statements concerning stock classes is CORRECT?
All common stocks fall into one of three classes: A, B, and C.
All firms have several classes of common stock.
All common stocks, regardless of class, must have the same voting rights.
All common stock, regardless of class, must pay the same dividend.
Some class or classes of common stock may be entitled to more votes per share than other classes
Submitted: 7 years ago.
Category: Homework
Expert:  SteveS replied 7 years ago.
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