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Suppose you use the dividend-discount model to calculate the price you are wiling to pay for a stock and find that this differs from the
Suppose you use the dividend-discount model to calculate the price you are wiling to pay for a stock and find that this differs from the market price. What might account for the difference in the market price of the stock and the price you are willing to pay for the stock? Instructions: In order to receive full credit, you must make a selection for each option. For correct answer(s), click the box once to place a check mark. For incorrect answer(s), click the option twice to empty the box. The difference could reflect the fact that you require a higher risk premium than the market in general. The difference could reflect the fact that you expect dividends for this company to grow more quickly than the market in general and so are willing to pay a lower price for the stock. The difference could reflect market pessimism, pushing the stock price below the fundamental value. The difference could reflect the fact that you think dividends for this company are going to grow more slowly than the market in general
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