Using the constant growth model, a decrease in the required rate of return from 15 to 13 percent combined with an increase in the growth rate from 5 to 6 percent would cause the price to
A) rise more than 50 percent.
B) rise less than 50 percent.
C) remain constant.
D) fall more than 50 percent.
E) fall less than 50 percent.

Question

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The Answer of Using the constant growth model, a decrease in the required rate of return from 15 to 13 percent combined with an increase in the growth rate from 5 to 6 percent would cause the price to
A) rise more than 50 percent.
B) rise less than 50 percent.
C) remain constant.
D) fall more than 50 percent.
E) fall less than 50 percent.

Using the Constant Growth Model, a Decrease in the Required