Question

In the one-period valuation model, a stock's value falls if the ________ rises. A. required return on equity B. dividend C. current price D. expected future price

Answer 1

In the one-period valuation model, a stock's value falls if the required return on equity rises.

How does the required return on equity affect stock's value?

The required return on equity is the return that stockholders demand for holding the stock of a particular company. The required return on equity is an indicator of the level of risk of a particular stock.

If the required return on equity rises, it means that the stock has an increased level of risk. Most stockholders would not want to hold this stock. This would lead to a fall in the price of the stock.

To learn more about how to determine the value of a stock, please check: https://brainly.com/question/18648993