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Exercise 2.4 Show the formula in (2.6) for the Gordon model, i.e. the last equal- ity, holds using elementary facts about geometric series. Po =
Exercise 2.4 Show the formula in (2.6) for the Gordon model, i.e. the last equal- ity, holds using elementary facts about geometric series. Po = Do(1+g) Do (1+g) 1+re (1+re) + + : Do I (1+8) (1+re)' = Do(1+8) re-8 (2.6)
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