Asked by
Natalie Rector
on Dec 02, 2024
Verified
Which of the following, holding all other variables constant, will cause an INCREASE in a constant growth stock's current value?
A) An increase in the growth rate
B) An increase in the market return (k)
C) An increase in the number years the stock is held
D) Both a & b
E) All of the above
Growth Rate
The rate at which a company's sales, earnings, dividends, or other key metrics increase over a particular period of time.
Market Return
The total gain or loss experienced by investors from holding a market portfolio over a specific period.
- Familiarize oneself with the components and calculations integral to the constant growth model for determining stock values.
Verified Answer
TB
Learning Objectives
- Familiarize oneself with the components and calculations integral to the constant growth model for determining stock values.