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Stock X has a required return of 1 2 % and a dividend yield of 5 % , and its dividend is expected to grow
Stock X has a required return of and a dividend yield of and its dividend is expected to grow at a constant rate forever. Stock Y has a required return of a dividend yield of and its dividend is expected to grow at a constant rate forever. Both stocks currently sell for $ per share. Which of the following statements is CORRECT?
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Stock X pays a higher dividend per share than Stock Y
Stock Y pays a higher dividend per share than Stock X
One year from now, Stock X should have the higher price.
Stock Y has a lower expected growth rate than Stock X
Stock Y has the higher expected capital gains yield.
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