The following is the Dividend Discount Model (DDM) used to price stocks:
### P_0 = \frac{d_1}{r-g} ###Assume that the assumptions of the DDM hold and that the time period is measured in years.
Which of the following is equal to the expected dividend in 3 years, ## d_3 ##?
The required return of a project is 10%, given as an effective annual rate. Assume that the cash flows shown in the table are paid all at once at the given point in time.
What is the Net Present Value (NPV) of the project?
Project Cash Flows | |
Time (yrs) | Cash flow ($) |
0 | -100 |
1 | 0 |
2 | 121 |
Diversification is achieved by investing in a large amount of stocks. What type of risk is reduced by diversification?
All things remaining equal, the variance of a portfolio of two positively-weighted stocks rises as:
Which one of the following bonds is trading at a discount?
Which of the following investable assets are NOT suitable for valuation using PE multiples techniques?
Which of the following companies is most suitable for valuation using PE multiples techniques?
Question 871 duration, Macaulay duration, modified duration, portfolio duration
Which of the following statements about Macaulay duration is NOT correct? The Macaulay duration: