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Question 6 Stocks X and Y have the following data. Assuming the stock market is efficient and the stocks are in equilibrium, which of the
Question 6
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? X YPrice $30 $30Expected growth (constant) 6% 4%Required return 12% 10%
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 X has a higher dividend yield than Stock Y. | |
E. | Stock Y has a higher capital gains yield. |
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