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

question 153

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

• 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:

Inventory Cost Flow

The method used to determine the cost of inventory sold and remaining in stock.

Ending Inventory

Ending inventory refers to the total value of goods available for sale at the end of an accounting period, crucial for calculating cost of goods sold and gross profit.

Rising Prices

A situation where the general level of prices for goods and services in an economy increases over a period of time.

LIFO Reserve

The difference between inventory reported using the Last-In, First-Out (LIFO) method and its value if the First-In, First-Out (FIFO) method were used, indicating the impact of inflation on inventory costs.