Suppose that in 2012 the expected dividends of the stocks in a broad market index equaled $240 million when the discount rate was 8% and the expected growth rate of the dividends equaled 6%. Using the constant-growth formula for valuation, it interest rates increase to 9%, the value of the market will change by.
a. - 10%
b. - 20%
c. - 25%
d. - 33%
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