Investmentsa lower retention aratio will raise the, Ask an Expert

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Investments

A lower retention aratio will raise the price-earning ratio. Why?

However, a higher retention rate should lead to a rise in expected growth (g).

But cutting the dividend to raise investment will only raise value if the investment has a positive NBV (net present value)

Explain why this is the case.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92337298

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