Unformatted text preview: funds face difficulties if the low interest rate-environment stays? 8. A company’s earnings constant growth rate is 6%? It’s constant payout ratio is 50%. The relevant discount rate is 8%. According to the dividend discount model what is the fair valuation of the company’s stock in terms of the price-earnings ratio? How is the stock’s dividend yield related to the future growth prospects of the company? 9. Explain the concept of tracking error. What are the strengths and weakness of the concept? What is the difference between ex post – and ex ante – tracking error? 10. Describe the basic concept behind portable alpha. Good luck!...
View Full Document
- Fall '15
- Dr. Hartmut Leser, earnings constant growth, typical RFP try, real portfolio risk