Multiple Choice
The next questions refer to the following.
Suppose a stock exhibits no dividend growth; the current dividend is $21, and the required rate of return is 7%. The share price is currently $360.
-Suppose there is a 20% chance of mean reversion. Then if the bubble persists during the current period,the price will
A) rise 3.025%
B) rise 5.63%
C) rise 7.00%
D) rise 27.00%
E) remain constant
Correct Answer:
Verified
Correct Answer:
Verified
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