Value Line's Estimated Dividends on an Index for Next Year

question 36

Essay

Value Line's estimated dividends on an index for next year are $2.00 while estimated earnings are $4.30. The expected spread between k and g is 4%.
(a) What is the P/E ratio?
(b) What is the estimated price for this index?

---

Definitions:

Operant Conditioning

A learning technique where the dynamism of a behavior is regulated by the offering of incentives or the implementation of correctives.

Respondent Behavior

Behavior that occurs as an automatic response to some stimulus, often used in the context of classical conditioning.

Justified Violence

The use of force or aggression considered acceptable under certain conditions or in self-defense, often debated within ethical and legal contexts.

Unjustified Violence

Acts of aggression or harm that have no moral or legal grounds to support them.