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A popular financial columnist argues that if earnings continue to grow at their recent 8% annual rate and are discounted at required rate of return
A popular financial columnist argues that if earnings continue to grow at their recent 8% annual rate and are discounted at required rate of return on equity of 10% a conservative estimate the stock market as measured by the Dow Jones Industrial Average is undervalued and is bound to rise to 50,000 within a few years. (The Dow is currently trading at 32,692.) Do you agree with the columnist? Why or why not?
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