1. A firm that has an ROE of 12% is considering cutting its dividend payout. Shareholders required rate of return for its stock is 14%. Given this information, which of the following statements is (are) correct? I. All else equal, the firm's growth rate will increase after the payout cut. II. All else equal, the firm's stock price will go up after the payout cut. III. All else equal, the firm's P/E ratio will increase after the payout cut.

1. I only
2. I and II only
3. II and III only
4. I, II, and III