Let's explore the difference between "expected" and "actual" return of a stock. 1) How might we calculate what the expected return of a stock should be? 2) How might we calculate the "actual" return of a stock?

2. Would a relatively high P/E ratio lead us to conclude that a stock is overvalued or undervalued? Why or why not?

1. How does the binomial model account of volatility in the stock?

Apart from using PE ratio, what is another way of valuing the stock price? if we have the EPS, Share Price, Dividend Per Share, ROE and the discount rate (R).  And what are the assumptions and the limitations of this model? What can be said about the dividend growth model? Similarly what can be said about the capital asset pricing model?

Describe precisely one way that you would test if a particular stock market is strong-form efficient.

How will the change in required return influence the price of a stock? How will the dividend growth rate influence the price of a stock?

A stock's internal rate of return (IRR) is the discount rate that cause the present value of future dividends and the price at which a stock is expected to be sold to equal the current price of the stock. O True O False C

Which of the following is needed to calculate a firm’s WACC?    A. the cost of carrying inventory    B. the amount of capital necessary to make the investment    C. the cost of preferred stock    D. the probability distribution of expected returns E. both b and c

In Shiller’s terminology, what are ex post stock prices?

What are the two sources, or components of return for stock?