Description
1 Problem of payment .(File: Exercise 3)
1 Problem about Dividend Discount Model.(File: Exercise 4)
1 Problem about CAPM.(File: Exercise 4)
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Explanation & Answer
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Financial Markets & Institutions
Equity Pricing Homework Exercise
Homework Exercise 4
The stock of company XYZ is currently price at $80 per share. Its earnings this year
(T=0) are $4.00 per share. It has paid out a dividend equal to 40% of its earnings for the
past several years. It’s Return on Equity (ROE) has been 15%.
1.
What is the company’s current Dividend Yield?
Dividend Discount Model
The market expects th...