Question

Nane ID: A Soks A nd Bhave the same price and are in equilibeium, but retura Which of the fellowing stalements is CORRECT Stock A has the higher reqpired rate of C U Stok Ahas a lower divide ield than Stock B, its expected capital gains yield be higher than Stock B' Sock B st have a higher divideed yield than Stock A e Stock A mut have a higher dividend yield than Stock B dir Stock Ahas a higher dividcod yield than Stoct B ts espected ca apital gains yield mst be lower than Stock B' e Stock A mast have both a higher dividend yield and a higher capital gains yield then Stock B uodauncotal factors that affect the cost of money as discussed in the text is the expected inflation is expected to be relatively high, then interest rates will tend to be rolatively low 21 One of the foor most f 22 If the demand curve for funds increased but the supply curve remained constant, we 23, If investors expect the rate of inflation to increase sharply in the future, then we should not be surprised to rate of inflation If other things held constant total arnount of funds supplied and demanded increase and interest rates in general also increase. see an upward sloping yield curve the

Answer 1

20. Statement A is correct, because if stock A has a higher required rate of return than stock B, and stock A has a lower dividend yield than stock B, then stock A's growth rate must be higher than that of stock B in order to offset the lower dividend yield.

21. False

22.. True

23. True