James is willing to settle for a 10% rate of return on EG shares at a time when investors, on average, are requiring an 11% rate of return on the same shares. Which of the following will happen?
A) James will be have to pay more for the shares than he was willing to pay.
B) James will be happy to buy the shares for less than he was willing to pay.
C) Investors with different required rates of return will pay different prices for the shares.
D) James will not be able to buy the shares unless the price changes.
Correct Answer:
Verified
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