Using the constant growth model, an increase in the required rate of return from 14 to 15 percent combined with an increase in the growth rate from 6 to 7 percent would cause the price to
A) rise more than 1%.
B) rise less than 1%.
C) remain constant.
D) fall more than 1%.
E) fall less than 1%.

Question

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The Answer of Using the constant growth model, an increase in the required rate of return from 14 to 15 percent combined with an increase in the growth rate from 6 to 7 percent would cause the price to
A) rise more than 1%.
B) rise less than 1%.
C) remain constant.
D) fall more than 1%.
E) fall less than 1%.

Using the Constant Growth Model, an Increase in the Required