Which of the following will increase (V0) , the shareholder wealth maximization model of the firm:V0.(shares outstanding) = t = 1 ( t) / (1 + ke) t + Real Option Value.
A) Decrease the required rate of return (ke) .
B) Decrease the stream of profits ( t) .
C) Decrease the number of periods from to 10 periods.
D) Decrease the real option value.
E) All of the above.
Correct Answer:
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