Consider the Data in Table 17 $\Delta$ P^s/p^s Is the Growth Rate of the Stock Price

question 87

Essay

Consider the data in Table 17.1 below, which shows the relevant data for six firms' stocks: GE, Apple, Bank of America, Exxon, Pfizer, and Home Depot. R^F is the risk-free rate and $\Delta$ p^s/p^s is the growth rate of the stock price. Additionally, the table has the actual market price of each stock (p_M) in September 2016. Use the stock price arbitrage equation to calculate the no-arbitrage price of the stock. Given your answer, should you buy the stock or put the money into a safe asset?Table 17.1: Relevant Stock Data
(Source: Morningstar [9/1/2016])

---

Definitions:

Experiencers

Individuals who prioritize hands-on or engaging activities to gain new experiences, often targeted in marketing for lifestyle-related products or services.

Facebook

A website where users may create a personal profile, add other users as friends, and exchange comments, photos, videos, and “likes” with them.

Opinion Leader

An individual who influences the attitudes, opinions, or behaviors of others through their expertise, authority, or personality.

Purchase Decision

The stage in the buying process where a consumer chooses to buy a specific product or service, often after evaluating alternatives and making comparisons.