Suppose that the dividends just paid by a broad market index equals $52.64 million. The appropriate discount rate for the market is 8.96% per annum with participants believing that dividends paid out by the market will grow by 2.92% per annum in perpetuity. Using the constant-growth formula for valuation, if the market's dividend growth rate changes to 4.42%, the market value would increase by Answer %. [Note: Your answer must be in percentage and accurate to 2 decimal places, but you may leave your answer with more than 2 decimal places.]

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The constantgrowth formula for valuation is Market Value Dividend Discount Rate Growth Rate In th... View the full answer