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Daniel [21]
4 years ago
8

If Professor Siegel is correct that stocks are less risky than bonds, then the risk premium on stock may be zero. Assuming that

the risk-free interest rate is 2.5 percent, the growth rate of dividends is 1 percent and the current level of dividends is $70, use the dividend-discount model to compute the level of the S
Business
1 answer:
Ulleksa [173]4 years ago
5 0

If Professor Siegel is correct that stocks are less risky than bonds, then the risk premium on stock may be zero. Assuming that the risk-free interest rate is 2.5 percent, the growth rate of dividends is 1 percent and the current level of dividends is $70, use the dividend-discount model to compute the level of the S&P 500 that is warranted by the fundamentals.

Instruction: Round your response to 2 decimal places.

The level of the S&P 500 is

Answer:

Dividend discount model:

Price= D(1+g)/r-g

g=growth rate 1%

r= as given in question risk free rate 2.5%

D₀= $70

D₁=$70(1+0.01)  with growth rate

Solution:

70(1+0.01)/(0.025-0.01)

=$4713.33

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Answer:

the holding period return is 3.77%

Explanation:

The computation of the holding period return is shown below:

Holding period return is

= (Income + (Selling price - Purchase price)) ÷ Purchase price

= ($3 + ($52 - $53)) ÷ 53

= 3.77%

Hence, the holding period return is 3.77%

We simply applied the above formula so that the correct value could come

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Germs are commonly known to be everywhere and can be spread in various ways, such as through the air in sneezes, coughs, or even breaths.

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Answer: Please refer to the explanation section

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The question incomplete we are required to differentiate events that will shift the demand curve of Boston Lager to the left and events that will not shift the demand curve but the events are not provided in the question. however because it is clear what the question requires i will list Events that cause a shift in the demand curve and events that will not shift the demand curve.

events that will shift the demand curve of Boston Lager to the left

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events that will NOT shift the demand curve of Boston Lager

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