Multiple Choice
You originally required a risk premium of 6 percent in addition to the rate of return on safe assets before you would purchase shares of Techno Company stock. If you and other investors reduce the risk premium you require to 4 percent, the price of Techno Company stock will:
A) increase.
B) decrease.
C) equal the old risk premium plus the new risk premium.
D) equal the new risk premium plus the rate of return on safe assets.
Correct Answer:
Verified
Correct Answer:
Verified
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