1. Is the Discounted Dividend Model a good valuation model for Starbucks? Why or why not? Based on the different valuation models, which one would work best?
2. What is meant by the term dividend policy ?
3. The common stock of Moore Inc. is expected to lose 6% in a recession, earn 8% in a normal economy, and earn 15% in a booming economy. The probability of a boom is 5 percent while the probability of a recession is 45 percent. What is the expected return on this stock? What is the standard deviation?