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Under the Assumption That the Future Stream of Interest Rates

Question 32

Multiple Choice

Under the assumption that the future stream of interest rates is perpetual and fixed,dividend ratio predicts a low future equity premium,when:


A) stocks are equally prices compared to their future dividends.
B) stocks have high prices compared to their future dividends.
C) stocks have low prices compared to their current dividends.
D) stocks have high prices compared to their current dividends.

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