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QUESTION 5 Some Model Assumtions and Restrictions Read Section 9-5D: Required Conditions for the Constant Growth Model Select all below that are assumptions of this
QUESTION 5 Some Model Assumtions and Restrictions Read Section 9-5D: Required Conditions for the Constant Growth Model Select all below that are assumptions of this model The growth rate (g) can be zero - this is the perpetuity formula in Chapter 5 The Required Rate of Return can be negative The Required Rate of Return (1) must be larger than the Growth rate (g) | The growth rate remains constant - this is an assumption of the model
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