Stocks X and Y Have the Following Data A) Stock X Has a Higher Dividend Yield Than Stock

question 55

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? $\begin{array}{lrr}&\underline{\text {X} }& \underline{\text{Y}}\\ \text { Price } & \$ 30 & \$ 30 \\\text { Expected growth (constant) } & 6 \% & 4 \% \\\text { Required return } & 12 \% & 10 \%\end{array}$

• 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.

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Definitions:

Economic Depression

An extended period of significant decline in economic activity across a region or country, marked by high unemployment, low production, and reduced consumer spending.

Informational Influence

A form of social influence that occurs when individuals change their beliefs or behavior based on the information received from others.

Private Acceptance

Involves internalizing and genuinely agreeing with a group's beliefs or behaviors, even when no one else is observing.

Descriptive Norms

The perception of what behaviors are common or typical within a group, influencing individuals' behavior based on what they perceive others are doing.