Think about the electric utility industry.

In 2009, the dividend paid by the utility company, DTE Energy Co. (DTE), was $2.12.

Using D₀ =$2.12, k = 5.75%, and g = 2%, calculate an estimated value for DTE.

Note: the actual mid-2009 stock price of DTE was $40.29.

What are the possible explanations for the difference?