Other things remaining equal,the price today and the growth rate are inversely related.

Name: Other things remaining equal,the price today and the growth rate are inversely related.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

This is because as the growth rate increases, the expected future cash flows of the investment also increase, which in turn increases the present value of the investment and therefore its price. Conversely, as the growth rate decreases, the present value and price of the investment also decrease.

Other Things Remaining Equal,the Price Today and the Growth Rate