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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 $ billion, pays a relatively high dividend with little increase in earnings, and has a PE ratio of Stock Y has a market capitalization of $ billion but does not currently pay a dividend. Stock Y has a PE ratio of Stock Z a housing industry company, has a market capitalization of $ million and a PE of
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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