Which of the following situations accurately describes a growth stock,assuming that each firm has a required return of 12 percent?

Question

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A growth stock is a stock that has investment opportunities yielding returns greater than the required return. In this case, the required return is 12 percent. Only option C states that the firm has investment opportunities yielding 15 percent, which is greater than the required return, indicating that it is a growth stock. The other options, A and B, do not describe growth stocks since they have investment opportunities yielding less than or equal to the required return. Option D is incorrect because option A does not describe a growth stock.

Which of the Following Situations Accurately Describes a Growth Stock,assuming