Carla Was Startled by an Extremely Loud Bang That Sounded

question 18

Essay

Carla was startled by an extremely loud bang that sounded like a gunshot. Her heartbeat accelerated rapidly.
When she found that the noise was only a car backfiring, she felt greatly relieved but her heart kept beating
heavily for over half an hour. Why did this happen?

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Definitions:

Required Return

The minimum gain investors expect from an investment, considering its risk level; synonymous with required rate of return.

Dividend Growth Rate

The annual rate at which the dividends paid by a stock is expected to grow.

Market Equilibrium

Market equilibrium is a condition where supply equals demand for a product, resulting in stable prices.

Dual-Class Shares

Equity structures in which one class of shares offers more voting rights than another, typically to concentrate voting power with a certain group or founder.