A company's earnings are unchanged, but its required return rises.
Holding all else constant, what happens to its stock's intrinsic value?
Answer: C - It falls as cash flows are discounted more.
Reason: Higher required return = higher discount rate = lower present value.
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Holding all else constant, what happens to its stock's intrinsic value?
Answer: C - It falls as cash flows are discounted more.
Reason: Higher required return = higher discount rate = lower present value.
What's your pick?
#StockMarket #Trading #BinanceSquare #Investing