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? XYPrice$30 $30 Expected growth (constant)6% 4% Required return12% 10% ?
A. Stock X has a higher dividend yield than Stock Y.
B. Stock Y has a higher dividend yield than Stock X.
C. One year from now, Stock X's price is expected to be higher than Stock Y's price.
D. Stock X has the higher expected year-end dividend.
E. Stock Y has a higher capital gains yield.
Answer: C
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