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The price of the FTSE / ASE 20 index is 1,650 points and analysts' forecasts for the average dividend yield of the companies making up
The price of the FTSE / ASE 20 index is 1,650 points and analysts' forecasts for the average dividend yield of the companies making up that index are 3%. If the nominal GDP growth rate is 6% and the required return on investor equity is 10%, calculate whether this index is overvalued or underestimated. What rate of profit growth does the market anticipate - discounts for the coming years?
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