finance 4/08/17

Explain why you would change your nominal required rate of return if you expected the rate of inflation to go from 0 (no inflation) to 4%.  Give an example of what would happen if you did not change your required rate of return under these conditions.



Required Rate of return on Common Stocks 14.00%
Inflation rate       5.00%
Growth rate of the economy     3.00%
Interest rate on T-Bill     8.15%
  • February 24, 2018
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University of Nairobi