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You are considering three potential stock investments. Stock X is a blue chip stock issued by a company with $12 billion in market capitalization. Its
You are considering three potential stock investments. Stock X is a blue chip stock issued by a company with $12 billion in market capitalization. Its dividend yield has been about 6 percent per year for several years, but its price hasn't appreciated much. It has a P/E ratio of 8. Stock Y has a $3 billion market cap, pays a very small dividend, and has seen an average annual price appreciation of 15 percent over the last several years. Its P/E ratio is 14. Stock Z has a $500 million market cap and pays no dividend. Although it has yet to show a profit since it went public three years ago, its price has increased 25 percent per year in each of the last two years. (a-c) Identify the capitalization for each stock. Stock X Stock Y Mid-cap Small-cap Large-cap Stock Z
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