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7 Suppose that next year the expected dividends of the stocks in a broad market index equaled $1000000 when the discount rate was 10.5% and
7 "Suppose that next year the expected dividends of the stocks in a broad market index equaled $1000000 when the discount rate was 10.5% and the expected growth rate of the dividends equaled 2.5%. Using the constant-growth formula for valuation, if interest rates change to 9%, the percentage change in the value of the market index is Note: Express your answers in strictly numerical terms. For example, if the answer is 5%, write 0.05
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