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Question
The explicit forecast period must be long enough for the company to reach a steady state. Which of the following is NOT a desirable property of that steady state?
a) The growth rate rises above the required return on capital.
b) The company earns a constant rate of return on existing capital.
c) The company earns a constant rate of return on new capital invested.
d) The company reinvests a constant proportion of its operating profits into the business each year.
Answer
This answer is hidden. It contains 14 characters.
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