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An investor is considering purchasing one of the following three stocks. Stock X has a market capitalization of $ 7 billion, pays a relatively high

An investor is considering purchasing one of the following three stocks. Stock X has a market capitalization of $7 billion, pays a relatively high dividend with little increase in earnings, and has a P/E ratio of 12. Stock Y has a market capitalization of $64 billion but does not currently pay a dividend. Stock Y has a P/E ratio of 40. Stock Z, a housing industry company, has a market capitalization of $800 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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