Question
1) Show that based on the Dividend Discount Model (DDM), the expected excess return depends on the Dividend-Price ratio. Carefully outline any assumptions you might
1) Show that based on the Dividend Discount Model (DDM), the expected excess return depends on the Dividend-Price ratio. Carefully outline any assumptions you might use.
2) Use the dividend discount model to show that the model predicts that the dividend price ratio is constant.
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The Macro Economy Today
Authors: Bradley R. Schiller, Karen Gebhardt
14th edition
1259291820, 978-1259291821
