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

question 30

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

• A)Stock Y has a higher dividend yield than Stock X.
• B)One year from now, Stock X's price is expected to be higher than Stock Y's price.
• C)Stock X has the higher expected year-end dividend.
• D)Stock Y has a higher capital gains yield.
• E)Stock X has a higher dividend yield than Stock Y.

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Definitions:

Political Organization

The way in which a society creates and structures its political institutions, processes, and relationships to make collective decisions and govern behavior.

Chiefdoms

A form of hierarchical political organization in non-industrial societies usually based on kinship, and led by a chief.

Hereditary

Relating to characteristics, properties, or conditions that are passed from parents to their offspring through genes.

Natural Selection

The evolutionary process through which factors in the environment exert pressure, favoring some individuals over others to produce the next generation.