Stocks that have the same expected risk should:
A)offer the same dividend payment.
B)have the same sustainable growth rate.
C)have the same price.
D)have the same expected rate of return.

Question

Quizplus · Accepted Answer

Stocks with the same expected risk should have the same expected rate of return according to the capital asset pricing model (CAPM), which takes into account the risk-free rate, market risk premium, and beta (a measure of systematic risk) of the stock. Dividend payment and sustainable growth rate may vary based on the company's individual circumstances and are not directly related to expected risk. Price may also vary based on other factors such as supply and demand.

Stocks That Have the Same Expected Risk Should