If the fair value of a popular stock market index, determined by using the dividend discount model and data from the market index, were priced above the current level of the index, an analyst may conclude that:
A) the market is overvalued.
B) the fair value determined has no relevance to the current index.
C) the market is undervalued.
D) the dividend discount model cannot be used to estimate a fair value level of the market.
Correct Answer:
Verified
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