An increase in a firm's expected growth rate would normally cause the firm's required rate of return to
A) Increase.
B) Decrease.
C) Fluctuate.
D) Remain constant.
E) Possibly increase, possibly decrease, or possibly remain unchanged.

Question

Quizplus · Accepted Answer

An increase in expected growth rate can affect the risk perception and future cash flows, leading to changes in the required rate of return, which could increase, decrease, or remain unchanged depending on investor expectations and market conditions.

An Increase in a Firm's Expected Growth Rate Would Normally