What happens to the price of a stock if you increase or decrease the required rate of return?...

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What happens to the price of a stock if you increase or decrease the required rate of return? Explain.

Required Rate of Return (RRR):

Required rate of return is the return rate that an investor expects on its invested asset and is used to measure the potential earning on the asset. There are two methods to calculate, Dividend Discount Model and CAPM.

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The price of stock and required rate of return share an inverse relationship with each other.

This is because, other things remaining same, to have a...

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Required Rate of Return (RRR): Formula & Calculation

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Chapter 1 / Lesson 29
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Learn about the required rate of return. Understand what the required rate of return is, examine the required rate of return formulas, and learn how to calculate it.


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