1. What is the difference between the expected return and the required return? When should the two returns be equal?
2. What is the difference between the value of a stock and its price? When should they be equal?
3. What variables affect the value of a stock according to the dividend-growth model? What role do earnings play in this model?
4. How do interest rates and risk affect a stock's price in the Capital Asset Pricing Model?
5. The efficient market hypothesis suggests that it is difficult to outperform the market on a consistent basis. Are there possible exceptions to the hypothesis that concern the valuation of common stock?