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?

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Definitions:

Centered Moving Average

A method to smooth data series and analyze trends, calculated by averaging a sequence of terms in the middle of the series.

Liquor Sales

The total volume or amount of alcoholic beverages sold within a specified period, often tracked for economic or regulatory purposes.

Moving Average

A statistical technique used to analyze data points by creating a series of averages of different subsets of the full data set, commonly used in financial markets to identify trends.

Moving Average

A statistical technique used to smooth out short-term fluctuations and highlight longer-term trends in data.