20 Suppose that investors were stubborn and pessimistic about corporate earnings growth, so they consistently forecast lower

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20 Suppose that investors were stubborn and pessimistic about corporate earnings growth, so they consistently forecast lower earnings than actually materialized. How might this affect the return to the stock market? Do you think that the equity premium would be higher or lower than if investors’ expectations were accurate?

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MandB 3

ISBN: 978-1285167978

3rd Edition

Authors: Dean Croushore

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