About the constant growth model

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Which of the following statements is true about the constant growth model?

a. When using a constant growth model to analyze a stock, if an increase in the required rate of return occurs while the growth rae remains the same, this will leae to a decreased value of a the stock.

b. when using a constant growth model to analyze a stock, if an increase in the required rate of return occurs while the growth rate remains the same, this will lead to an increased value of the stock.

Reference no: EM13722318

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