Coursehero.com with 12% of return on equity and is planning on increasing dividend payout. The firm has a growth rate of 6% and a capital gain yield of 15%. Given this information, which of the following statements is (are) correct?

I. All else equal, the firm's growth rate will accelerate after the payout change.

II. All else equal, the firm's retention ratio will go down after the payout change.

III. All else equal, the firm's P/E ratio will increase after the payout change.

Multiple Choice

a)II only

b)I and III only

c)II and III only

d)I only