True about the constant growth model

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Reference no: EM13913335

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 growth rate occurs while the required return remains the same, this will lead to an increased value of the stock.

b. When using a constant growth model to analyze a stock, if an increase in the growth rate occurs while they require return remains the same, this will lead to a decreased value of the stock.

Reference no: EM13913335

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