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A stock's price [P= D1/(K g)] will tend to fall if 1. the firm's beta declines (Hint: k= R f + beta* MRK, where MRK

A stock's price [P= D1/(K g)] will tend to fall if 1. the firm's beta declines (Hint: k= Rf + beta* MRK, where MRK is market risk premium). 2. the firm's beta increases 3. the riskfree rate, Rf, declines 4. the riskfree rate increases

1 and 3

1 and 4

2 and 3

2 and 4

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