the constant growth model is?

Q: Assuming that the pure expectations theory is correct, how are expected short-termrates used to…

A: Pure expectations theory believes that expected future rates can be represented by the forward…

Q: What is nonconstant growth model?

A: Definition: The dividend paid to the stockholder is varying continuously at the higher side. The…

Q: Describe what the zero-coupon yield curve measures. Quickly sketch what you expect the likely shape…

A: A zero-coupon yield curve describes a zero-coupon yield bond which pays no coupon. Yield from zero…

Q: How can we find Yield to maturity?

A: Yield to maturity (YTM) is the foreseen absolute profit for a bond if the bond holds until due or…

Q: Nhat is the exact rate of return?

A: The net gain or net loss of an investment over a predetermined time period is referred to as a rate…

Q: What is growth option?

A: Mutual funds have two types of schemes. Growth option and dividend option. Mutual funds having…

Q: What causes the marginal rate of return to change over time?

A: Introduction: Marginal rate of return can be defined as the return attained or earned by holding a…

Q: Describe the intuition behind the Gordon growth model and the CAPM. What are the theoretical and…

A: Valuation of stock: Equity valuation refers to all tools and methodologies used by investors to…

Q: What is growth rate?

A: A growth rate is the percentage increase in the cash flows of the company. A growth can be measured…

Q: How could I estimate the Sustainable Growth Rate considering the ROE?

A: The sustainable growth rate (SGR) is the maximum rate of growth that a company can sustain without…

Q: How Broader Diversification Increases Expected Return?

A: The expected return on an investment refers to the weighted average of estimated returns and…

Q: Discuss the assumptions underlying the Gordon growth model.

A: Gorden Model recognizes that the current market price of the share reflects expected dividends . In…

Q: What do you notice about the change in the cost of equity as beta increases? (Select the best…

A: Answer 1. Beta: To compare the movement o the individual stock with the whole market, the…

Q: What is "value-minus-growth" meaning? and how is it calculated? please explain in detail this…

A: One of the three factors in a Fama-French Model is HML (high minus low) or Value minus growth. As…

Q: So if the Return = (Total Dividend + change in market price ) / purchase Price, then why is the…

A: The total return is the actual rate of return on an investment or pool of investments during a…

Q: 1.Why the advantage of Portfolio analysis is it raises the issue of cash-flow availability for use…

A: Portfolio analysis is a method of evaluating an investment portfolio to meet the requirements of an…

Q: In the endogenous growth model, suppose that there are three possible uses of time. Let u denote the…

A: Fraction is an important part of mathematics as it  is basically type of division.Unemployment is a…

Q: The constant growth model is useful if?

A: The constant growth model is the model in which growth rate remains same.

Q: What is the sustainable growth rate (SGR)? Interpret. What is the internal growth rate (IGR)?…

A: Sales =RO 7,500 Net Income (20%) = 7,500 * 20% = 1,500 Dividend Distributed = 900 Retained Earnings…

Q: What is the shape of the yield curve given the term structure below? What expectations are investors…

A: Yield Curve: The yield curve plots the different interest rates and maturities of bonds. It acts as…

Q: A) What was your expected yield to maturity? B) What was your actual rate of return?

A: The yield to maturity (YTM) is the annual percentage rate of return on a bond if the investor…

Q: The future value of an investment increases as the number of periods increases   True or Fase

A: Future value means the value of investment after x period of time compounded at the interest rate.

Q: When will the prime rate go up and what factors drive it?

A: The prime rate is the best interest rate you can get, and it's influenced by the economy.   In order…

Q: At the steady state both capital and output are constant

A: At the steady state both capital and output are constant Answer – True

Q: /hat is the exact rate of return?

A: MACHINE A         PV FACTOR PRESENTVALUE A 0 FIRST COST -8000   8000…

Q: What are three ways to estimate the expected dividend growthrate?

A: Expected Dividend growth rate is the prospective growth expected by investors on the dividend paid…

Q: Write out and explain the valuation formula for a constant growthstock.

A: Valuation Formula for a constant growth stock is shown below: Here, P0 = Intrinsic Value of stock…

Q: Do you think we can use the constant growth method to predict non constant growth price?

A: 1) Constant Growth Model: This assumes that a company's dividends are going to continue to rise at a…

Q: Define constant growth model

A: The constant growth model is a method for valuing the share price of a stock. It calculates the…

Q: Market rate of return Dividend growth rate Total yield

A: In dividend based valuation of stock there are two types of growths one is constant growth and other…

Q: difference between the two-stage multistage DDM growth model and the H-Model

A: DDM or Dividend Discount Model is the model to value the equity shares. To value shares the…

Q: nually. Investors required rate of return is ce

A: Coupon rate =8.47% T=7 Face value=50,000 Price=45,000 Yield to maturity = C +(face value…

Q: What is the sustainable growth rate?

A: Computation of the Return on equity: The dividend pay-out ratio is specified as 45%, then the…

Q: Define Growth investors

A: An investor is a person or group of persons who purchase an asset with the expectation of rising in…

Q: When computing an interest or growth rate, the rate will increase the smaller the future value,…

A: Future value refers to the worth of the present sum or a series of cash flows at a future date. It…

Q: a) What is the level of saving rate that maximizes consumption at the steady state?

A: 1. In Solow’s growth model, a high level of savings leads to a large steady-state capital stock and…

Q: An increase in the interest rate will cause A an increase in planned investment and an increase in…

A: Interest Rate: An interest rate is the amount of money that a lender charges a borrower in exchange…