Question: A firm has a ROE equal to the required rate of return on its stock, then A. DSB can increase stock price and P/E by

A firm has a ROE equal to the required rate of return on its stock, then A. DSB can increase stock price and P/E by retaining more earnings. B. DSB can increase stock price and P/E by increasing the dividend growth rate. C. DSB can increase stock price and P/E by retaining more earnings and increasing the growth rate. D. The amount of earnings retained by the firm does not affect the stock price or the P/E. E. None of the options are correct.

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