Assume that the dividend payout ratio on the S&P/TSX Composite Index will be 40 per cent when the rate on long-term government bonds falls to 9 per cent. Investors being more risk averse demand an equity risk premium of eight per cent. If the growth rate of dividends is expected to be 10 per cent, what will be the price of the market index if the earnings expectation is $30?

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The Answer of Assume that the dividend payout ratio on the S&P/TSX Composite Index will be 40 per cent when the rate on long-term government bonds falls to 9 per cent. Investors being more risk averse demand an equity risk premium of eight per cent. If the growth rate of dividends is expected to be 10 per cent, what will be the price of the market index if the earnings expectation is $30?

Assume That the Dividend Payout Ratio on the S&P/TSX Composite