If a firm's expected growth rate increased then its required rate of return would

Question

Quizplus · Accepted Answer

An increase in a firm's expected growth rate could lead to various outcomes for its required rate of return. It might increase if investors demand a higher return for the perceived higher risk associated with growth. It could decrease if the growth is seen as reducing risk, or it might remain constant if the market views the growth as expected and already priced in.

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