Stocks X and Y Have the Following Data A) Stock X Pays a Higher Dividend Per Share Than

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?
$\begin{array} { l c c } & X & Y \\\text { Price } & \$ 25 & \$ 25 \\\text { Expected dividend yield } & 5 \% & 3 \% \\\text { Required return } & 12 \% & 10 \%\end{array}$

A) stock x pays a higher dividend per share than stock y.
B) one year from now, stock x should have the higher price.
C) stock y has a lower expected growth rate than stock x.
D) stock y has the higher expected capital gains yield.
E) stock y pays a higher dividend per share than stock x.

Correct Answer:

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