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An investor is considering purchasing one of the following three stocks. Stock X has a market capitalization of $8 billion, pays a relatively high dividend
An investor is considering purchasing one of the following three stocks. Stock X has a market capitalization of $8 billion, pays a relatively high dividend with little increase in earnings, and has a P/E ratio of 11. Stock Y has a market capitalization of $60 billion but does not currently pay a dividend. Stock Y has a P/E ratio of 37. Stock Z, a housing industry company, has a market capitalization of $807 million and a P/E of 20. a. Classify these stocks according to their market capitalizations. b. Which of the three would you classify as a growth stock? Why? c. Which stock would be most appropriate for an aggressive investor? d. Which stock would be most appropriate for someone seeking a combination of safety and earnings
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