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Do Stock Prices Move Too Much to be Justified By Subsequent Changes in Dividends?

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Do Stock Prices Move Too Much to be Justified By Subsequent Changes in Dividends?

Do Stock Prices Move Too Much to be Justified By Subsequent Changes in Dividends? A simple model that is commonly used to interpret movement in corporate common stock price indexes asserts that real stock prices equal the present value of rationally expected or optimally forecasted future real dividends by a constant real discount rate.

H/T noahpinionblog.blogspot.com

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