I am reviewing this homework question and I am not understanding. I'm not sure if I am understanding correctly that the higher retained earnings means investors will receive higher dividends. Could this be explained better so I can understand the concept?

Which of the following is true about retained earnings?

• Lower retained earnings makes a company more attractive to investors.
• Higher retained earnings means investors receive higher dividends.
• Higher retained earnings means investors receive lower dividends.
• Lower retained earnings cause a decrease in the stock price.