Q$2$: PFB Inc.$\text{'}$s dividend $($D$1)$ is $$7,$ and its cost of equity $=12\%,$ while long$-$term corporate bonds $($with a similar risk profile to that of PFB Inc$)$ average $8\%.$ PFB inc, whose net income is $$10MM,$ currently has a $100\%$ dividend payout policy and $$300$ in assets. The CFO is considering changing to the plowback ratio to $40\%.$ If implemented, how will investors react to the CFO's decision $($assume PFB Inc's liabilities total $$250$ MM$)?$