If a firm's expected growth rate increased then its required rate of return would
A) decrease.
B) fluctuate less than before.
C) fluctuate more than before.
D) possibly increase, possibly decrease, or possibly remain constant.
E) increase.

Question

Quizplus · Accepted Answer

The required rate of return could possibly increase, decrease, or remain constant because it depends on various factors such as the risk associated with the growth, the nature of the growth (whether it's sustainable or not), and market perceptions.

If a Firm's Expected Growth Rate Increased Then Its Required