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Suppose the Price/Earnings Ratio for the S&P 500 is 15 and the dividend payout ratio of the S&P 500 is 28%. The future growth rate

  1. Suppose the Price/Earnings Ratio for the S&P 500 is 15 and the dividend payout ratio of the S&P 500 is 28%. The future growth rate of dividends is expected to be 3.35%.
    1. Compute the expected return of the Market.
    2. Use Goal Seek or Solver to determine the dividend growth rate that would yield an expected Market return of 7%.

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