Using the constant growth model, a decrease in the required rate of return from 15 to 13% combined with an increase in the growth rate from 5 to 6% would cause the price to
A) Rise more than 50%.
B) Rise less than 50%.
C) Remain constant.
D) Fall more than 50%.
E) Fall less than 50%.

Question

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The Answer of Using the constant growth model, a decrease in the required rate of return from 15 to 13% combined with an increase in the growth rate from 5 to 6% would cause the price to
A) Rise more than 50%.
B) Rise less than 50%.
C) Remain constant.
D) Fall more than 50%.
E) Fall less than 50%.

Using the Constant Growth Model, a Decrease in the Required