1. The expected dividend yield for a stock is defined as the most recent dividend, which has already been paid, over the actual market price of the stock. T/F
2. A publicly owned corporation is a company whose shares are held by the investing public, which don't include such institutional investors as banks. T/F
3. If two firms have the same current dividend and the same expected dividend growth rate, their stocks must sell at the same current price or else the market will not be in equilibrium. T/F
4. Stock X has a required return of 12% and a dividend yield of 5%, and its dividend is expected to grow at a constant rate forever. Stock Y has a required return of 10%, a dividend yield of 3%, and its dividend is expected to grow at a constant rate forever. Both stocks currently sell for $25 per share. Which of the following statements is CORRECT?

a. Stock Y pays a higher dividend per share than Stock X.

b. Stock X pays a higher dividend per share than Stock Y.

c. Stock Y has a lower expected growth rate than Stock X.

d. Stock Y has the higher expected capital gains yield.