Explain the economic reasoning

Reference no: EM13857791

We considered a model of stock price determination that leads to the conclusion that the price of a stock in the current time period is equal to the present value of the stream of future dividends. The model is based on the following assumption : s (t) = [d(t+1)+s(t+1)] / 1+rExplain in words what the above assumption says and explain the economic reasoning that is used to justify the assumption.

Reference no: EM13857791

Questions Cloud

Generalizing the wittman model : Generalizing the Wittman Model Consider the following generalization of the Wittman model. There are two parties A and B. Party A is o?ce seeking, that is, its payo? is v > 0 if it wins the election and 0 otherwise. Party B is policy seeking and has..

The solution to a recessionary gap : According to the Keynesian Model, the solution to a recessionary gap or an inflationary gap is the same. Change the level of aggregate demand. True or False. Explain Why?

Find how much transmit power is required : Consider a point-to-point radio link between two highly directional antennas in a stationary environment. The antennas have antenna gains of 30 dB, distance attenuation is 150 dB, and the receiver has a noise figure of 7 dB. The symbol rate is 20 ..

Why do companies expand into foreign markets : Why do companies expand into foreign markets? What are some cross-country differences must companies expanding into foreign markets must navigate?

Explain the economic reasoning : We considered a model of stock price determination that leads to the conclusion that the price of a stock in the current time period is equal to the present value of the stream of future dividends. The model is based on the following assumption : s (..

Identify which of scenarios reflects appropriate techniques : Identify which of the scenarios reflects appropriate techniques for setting up for art activities. Why? Discuss each which does not reflect appropriate techniques for setting up art activities

Determine the supply voltage e : Determine the supply voltage E. Find the load resistors RL2 and RL3. Determine the voltage divider resistor R1, R2, and R3.

Complete the planning process for a jrp session : Complete the planning process for a JRP session. Describe benefits of JRP as fact-finding technique. Describe a fact-finding strategy that will make the most of your time with end-users.

What is the margin of safety ratio : Guid Company had actual sales of $900,000 when break-even sales were $600,000. What is the margin of safety ratio?

User Account

All Pages