An investor prefers value stocks togrowth stocks should purchase the stock of companies with above-average:

A.market-to-book ratios.

B.price-to-earnings ratios.

C.dividend yields.

 

Correct Answer:C

Higher thanaverage dividend yield is a characteristic of a value stock, along with lowprice-to-earnings and low market-to-book ratios. Growth stocks arecharacterized by low dividend yields and high price-to-earnings and highmarket-to-book ratios.