An increase in a firm's expected growth rate would cause its required rate of return to a. decrease. b. fluctuate more than before. c. increase. d. possibly increase, possibly decrease, or possibly remain constant. e. fluctuate less than before.

d. possibly increase, possibly decrease, or possibly remain constant

Explanation:

The expected growth rate of a firm is only one input for the calculation of required return. The other factors include the price of the stock and the expected dividend.

If all others are held equal, an increase in the growth rate will cause the required return to increase, but if the dividend increases with the expected growth rate, this have the effect of decreasing the return rate.

So the increase in the firm’s expected growth rate would cause its required return rate to possible increase, possible decrease or possibly remain constant.

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans. 

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711.