Question
Consider the following expression which can be used to estimate the value of firms equity: Which of the following statements correctly describes implications of the
Consider the following expression which can be used to estimate the value of firms equity:
Which of the following statements correctly describes implications of the expression above for firm valuation?
Group of answer choices
None of the other statements correctly describe implications of the expression provided for firm valuation
Holding all else constant, as the proportion of a firms earnings retained within the firm increase, the value of firm equity increases
Holding all else constant, as the growth rate of firm earnings (and dividends) increases, the value of firm equity increases
Holding all else constant, as the required rate of return from the firms equity increases, the value of firm equity increases
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