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7.) a) Show the mathematical derivations of the dividend discount model (DDM); and hence of the abnormal earnings based valuation model, assuming clean surplus accounting.
7.) a) Show the mathematical derivations of the dividend discount model (DDM); and hence of the abnormal earnings based valuation model, assuming clean surplus accounting. (15 marks) b) Focusing on two papers studied in this course, explain the empirical evidence concerning returns to shareholders of bidder firms and target firms in mergers and acquisitions. (10 marks)
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