Question 3 a. Discuss the differences between primary and secondary market with ONE example for each. b. "Maximizing stock prices does not make sense because investors focus on short term results, and not on the long-term consequences." Comment on the statement. c. Respond true or false to the following statements relating to the dividend discount model. You MUST give reason for True/False statement. Explain where necessary. 1. The dividend discount model cannot be used to value a high-growth company that pays no dividends. 2. The dividend discount model will undervalue stocks because it is too conservative. 3. The dividend discount model will find more undervalued stocks when the overall stock market is depressed 4. Stocks that are undervalued using the dividend discount model have generally made significant positive excess returns over long periods (five years or more). 5. Stocks that pay high dividends and have low price/earnings ratios are more likely to be undervalued using the dividend discount model