Using the Constant Growth Model, an Increase in the Required

question 49

Multiple Choice

Using the constant growth model, an increase in the required rate of return from 14 to 18 percent combined with an increase in the growth rate from 8 to 12 percent would cause the price to

• A) fall more than 4%0
• B) fall less than 4%.
• C) rise more than 4%.
• D) rise less than 4%.
• E) remain constant.

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Definitions:

Erik Erikson

A developmental psychologist and psychoanalyst known for his theory on the psychosocial development of human beings.

Jonathan Haidt

A psychologist known for his research on morality, emotions, and the moral foundations theory.

Lawrence Kohlberg

A psychologist known for his theory of moral development, which proposes that morality progresses through a series of stages.

Jean Piaget

A Swiss psychologist known for his pioneering work in child development and his theory of cognitive development in children.