stocks x and y have the following data. assuming the stock market is efficient a

Question

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 price $30 expected growth 6% required return 12%

y price $30 expected growth 4% required return 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 form 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

Explanation / Answer

b) stock y has a higher dividend yield than stock x

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