Using the Constant Growth Model,an Increase in the Required Rate

question 67

Multiple Choice

Using the constant growth model,an increase in the required rate of return from 17 to 20 percent combined with an increase in the growth rate from 8 to 11 percent would cause the price to

• A) Rise more than 3%
• B) Rise less than 3%.
• C) Remain constant.
• D) Fall more than 3%.
• E) Fall less than 3%.

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Definitions:

Autonomic Division

The part of the nervous system responsible for control of the bodily functions not consciously directed, such as breathing, the heartbeat, and digestive processes.

Peripheral Nervous System

The part of the nervous system that lies outside the central nervous system, including nerves and ganglia, responsible for transmitting information to and from the brain and spinal cord.

Reflex

An automatic, involuntary reaction to a stimulus.

Sensory Neuron

A type of neuron that sends information from sensory receptors towards the central nervous system.