At the end of June 2007, the price/earnings ratio of the S&P 500 was 17.5. Assume that
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At the end of June 2007, the price/earnings ratio of the S&P 500 was 17.5. Assume that the index proxies for the market, that it has a 50% dividend payout ratio, and that dividends are expected to grow at 7%. Compute E(rM).
DividendA dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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