Assume that the dividend payout ratio on the S&P 500 will be 40 percent when the rate on long-term government bonds falls to 9 percent.Investors being risk averse demand an equity risk premium of 8 percent.If the growth rate of dividends is expected to be 10 percent,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 500 will be 40 percent when the rate on long-term government bonds falls to 9 percent.Investors being risk averse demand an equity risk premium of 8 percent.If the growth rate of dividends is expected to be 10 percent,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 500