When Applying the Earnings Multiplier Model, All of the Following

Multiple Choice

When applying the earnings multiplier model, all of the following will cause the required rate of return, k, to change EXCEPT

A) changes in the real risk-free rate.
B) changes in the retention rate.
C) changes in the rate of inflation.
D) changes in the risk premium for common stock.
E) All of these are correct (that is, all of these changes will cause a change in the required rate of return) .