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problem: Stocks X & Y have the following data.  Suppose the stock market is efficient & 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]      One year from now, Stock X's price is expected to be higher than Stock Y's price.

[B]      Stock X has the higher expected year-end dividend.

[C]      Stock Y has a higher capital gains yield.

[D]      Stock X has a higher dividend yield than Stock Y.

[E]      Stock Y has a higher dividend yield than Stock X.

 

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M916734

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