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Choose the following that are correct: a)everything else equal, a more risky firm should be evaluated by using a higher value of r b)everything else
Choose the following that are correct:
a)everything else equal, a more risky firm should be evaluated by using a higher value of "r"
b)everything else equal, a stock with higher risk will have lower value than one that is less risky (as estimated by Gordon's model)
c) You can model a stock that experiences a change in dividend policy by splitting the time line into two parts, as long as the dividends will have a steady growth after a specific point in time
d) If a firm becomes more risky, Gordon's model can be modified by increasing "g"
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