Stock valuation beneath equilibrium situation.
Stocks X and Y have the following data. Assuming the stock market is efficient and the stocks are in equilibrium, which of the following statements is CORRECT?
|
X
|
Y
|
Price
|
$30
|
$30
|
Expected growth (constant)
|
6%
|
4%
|
Required return
|
12%
|
10%
|
a. Stock X has a higher dividend yield than Stock Y.
b. Stock Y has a higher dividend yield than Stock X.
c. One year from now, Stock X's price is expected to be higher than Stock Y's price.
d. Stock X has the higher expected year-end dividend.
e. Stock Y has a higher capital gains yield.