Question: Based on the following table, determined which statement is the most accurate (Hint: you should first calculate dividend yield and P/E ratio for each): Stock

Based on the following table, determined which statement is the most accurate (Hint: you should first calculate dividend yield and P/E ratio for each):

Stock ABC Stock XYZ
Stock Price $100 $45
Dividend $2 $1.50
Earnings $6.67 $1.12

A.) ABC pays a higher dividend, but is relatively expensive based on its Price/Earnings ratio.

B.) ABC has a higher Dividend Yield, but is relatively expensive based on its Price/Earnings ratio.

C.) XYZ has a higher Dividend Yield, but is relatively expensive based on its Price/Earnings ratio.

D.) XYZ pays a lower dividend, but is relatively cheap based on it Price/Earnings ratio.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!