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Business, 26.11.2019 05:31 XTREME3336

Suppose that in 2012 the expected dividends of the stocks in a broad market index equaled $240 million when the discount rate was 8% and the expected growth rate of the dividends equaled 6%. using the constant-growth formula for valuation, it interest rates increase to 9%, the value of the market will change by.

a. -10%
b. -20%
c. -25%
d. -33%

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