Difference between the value of a stock and its price

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1. What is the difference between the expected return and the required return? When should the two returns be equal?

2. What is the difference between the value of a stock and its price? When should they be equal?

3. What variables affect the value of a stock according to the dividend-growth model? What role do earnings play in this model?

4. How do interest rates and risk affect a stock's price in the Capital Asset Pricing Model?

5. The efficient market hypothesis suggests that it is difficult to outperform the market on a consistent basis. Are there possible exceptions to the hypothesis that concern the valuation of common stock?

Reference no: EM131537213

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