Question: Explain how an increase in the risk-free interest rate affects share prices, the equity premium, and the rate of return on internal investments. What

Explain how an increase in the risk-free interest rate affects share prices,

Explain how an increase in the risk-free interest rate affects share prices, the equity premium, and the rate of return on internal investments. What determines whether an increase in the share of retained earnings increases or decreases share prices?

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An increase in the riskfree interest rate has several effects on share prices the equity premium and the rate of return on internal investments Lets examine each of these aspects 1 Share Prices Genera... View full answer

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Explain how an increase in the riskfree interest rate affects share prices, the equity premium, and the rate of return on internal investments.

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