Question: Why do stock prices change? Suppose the expected D1is $2, the growth rate is 5 percent, and rsis 10 percent. Using the constant growth model,

Why do stock prices change? Suppose the expected D1is $2, the growth rate is 5 percent, and rsis 10 percent. Using the constant growth model, what is the impact on stock price if g is 4 percent or 6 percent? If rsis 9 percent or 11 percent?

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