assume that the dividend payout ratio on the s&p 500 will be 40 percent when the rate

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assume that the dividend payout ratio on the s&p 500 will be 40 percent when the rate on long-term government bonds falls to 9 percent. investors being risk averse demand an equity risk premium of 8 percent. if the growth rate of dividends is expected to be 10 percent, what will be the price of the market index if the earnings expectation is $30?

a.213.44

b.266.56

c.171.43

d.384.00

Posted Date: May 17, 2024 11:05 AM

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