Question: Question 1: Define and explain the concepts surrounding the pricing bias of financial assets. To do this, define and explain the concept of market efficiency
Question 1: Define and explain the concepts surrounding the pricing bias of financial assets. To do this, define and explain the concept of market efficiency and its implications on intrinsic value, define and explain the concept of "perceived pricing error" of financial assets. Question 2: Gordon's model. a) Prove Gordon's formula. b) Is it possible to obtain a P0/E0 formula based on Gordon's formula? c) How do we estimate g, the sustainable growth rate, using the DuPont decomposition? Define and explain each of the elements of this formula.
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