If a Firm Has a Required Rate of Return Equal

question 16

Multiple Choice

If a firm has a required rate of return equal to the ROE,

• A)the firm can increase market price and P/E by retaining more earnings.
• B)the firm can increase market price and P/E by increasing the growth rate.
• C)the amount of earnings retained by the firm does not affect market price or the P/E.
• D)the firm can increase market price and P/E by retaining more earnings and increasing the growth rate.

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Definitions:

Stimulant Drug

A substance that increases the activity of the central nervous system.

Antidepressant Drug

Medication primarily used in the treatment of major depressive disorder and anxiety disorders by adjusting chemicals in the brain.

Outpatient Therapy

A form of treatment where patients receive care or therapy without being admitted to a hospital.

Psychoanalysis

A therapeutic method developed by Sigmund Freud, focusing on exploring unconscious desires and conflicts to understand and treat psychological disorders.