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a) What are three different dividend discount methods? How would you value stock (shares) based on these three methods? b) A 20-year bond has a
a) What are three different dividend discount methods? How would you value stock (shares) based on these three methods?
b) A 20-year bond has a coupon rate of 8 percent, and another bond of the same maturity has a coupon rate of 15 percent. If the bonds are alike in all other respects, which will have the greater relative market price decline if interest rates increase sharply? Why?
c) Why do bonds with long maturities fluctuate more in price than do bonds with short maturities?
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