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GameStop has a discount rate R=8%, earnings growth g=4%. Its current plowback ratio is b=0.4. The CFO announces the plowback ratio will increase from b=0.4

GameStop has a discount rate R=8%, earnings growth g=4%. Its current plowback ratio is b=0.4. The CFO announces the plowback ratio will increase from b=0.4 to b=0.5. What will happen to the stock price?

a. It increase

b. It decrease

c. It stays the same

d. Impossible to tell

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