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An analyst uses the Grinold-Kroner model to estimate the stock market return. The analyst forecasts a 1.5% dividend yield, 2% real dividend growth, 2% long-term inflation, 1% average annual reduction in share outstanding and an overall market contraction in valuation of 0.5%. What should be the analyst's forecast of the equity market return? a. 4% O b. 5% O C. 6% d. 7%

An analyst uses the Grinold-Kroner model to estimate the stock market return. The analyst forecasts a 1.5% dividend yield, 2% real dividend growth, 2% long-term inflation, 1% average annual reduction in share outstanding and an overall market contraction in valuation of 0.5%. What should be the analyst's forecast of the equity market return? a. 4% O b. 5% O C. 6% d. 7%

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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An analyst uses the Grinold-Kroner model to estimate the stock market return. The analyst forecasts a 1.5% dividend yield, 2% real dividend growth, 2% long-term inflation, 1% average annual reduction in share outstanding and an overall market contraction in valuation of 0.5%. What should be the analyst's forecast of the equity market return? a. 4% O b. 5% O c. 6% O d. 7%
Transcribed Image Text:An analyst uses the Grinold-Kroner model to estimate the stock market return. The analyst forecasts a 1.5% dividend yield, 2% real dividend growth, 2% long-term inflation, 1% average annual reduction in share outstanding and an overall market contraction in valuation of 0.5%. What should be the analyst's forecast of the equity market return? a. 4% O b. 5% O c. 6% O d. 7%
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