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If the P/E ratio on the S&P 500 is 10

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solution


Question

Question;If the P/E ratio on the S&P 500 is 10, given historical earnings growth patterns, what would be a reasonable estimate of long-run future expected rates of return on the stock market? Assume a long-run inflation rate of 2.5% per annum.

 

Paper#50824 | Written in 18-Jul-2015

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