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Under Dividend Discount Model, P = D / (r-g) 101.00=3.50/(r-0.06) r = 0.0946535 = 9.47% = required return


Since the article (or at least what you have posted since it's behind a paywall) is looking at "real", or inflation-adjusted, returns, I assume that by "index-linked", they mean bonds whose principal is adjusted based on some inflation index like the Consumer Price Index (CPI). Like most other financial instruments, they are priced by the ...

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