Stocks X and Y Have the Following Data ?
A) Stock Y Pays a Higher Dividend Per Share

question 72

Multiple Choice

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? $$\begin{array} { l r r } & \mathrm { X } & \mathrm { Y } \\\text { Price } & \$ 25 & \$ 25 \\\text { Expected dividend yield } & 5 \% & 3 \% \\\text { Required return } & 12 \% & 10 \%\end{array}$$
?

• A) Stock Y pays a higher dividend per share than Stock X.
• B) Stock X pays a higher dividend per share than Stock Y.
• C) One year from now,Stock X should have the higher price.
• D) Stock Y has a lower expected growth rate than Stock X.
• E) Stock Y has the higher expected capital gains yield.

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Definitions:

Oxidized

The process by which a substance loses electrons, often associated with the gain of oxygen or loss of hydrogen, in chemical reactions.

Neutralized

Neutralized describes the chemical process by which an acid and a base react with each other to form water and a salt, effectively cancelling out the characteristic properties of each.

Zinc Metal

A chemical element with the symbol Zn, atomic number 30, known for its resistance to corrosion and importance in various biological and industrial processes.

Oxidized

A chemical process where a substance loses electrons or gains oxygen, often resulting in a change in properties like increased rusting in metals or browning in fruits.