List the key variables that affect the P/E ratio and explain the relationship between each variable and the P/E ratio.

(a)growth rate in earnings; the higher the growth rate, the higher the P/E ratio

(b)general state of the economy; the better the economic outlook, the higher the P/E

(c)amount of debt in a company's capital structure; the lower the debt ratio, the higher the P/E

(d)current and projected rate of inflation; the lower the inflation, the higher the P/E

(e)level of dividends; the lower the dividend payout, the higher the P/E