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Record Distributors is a growing firm and has $1,200,000 in earnings and excess cash of $700,000. The company has had o good year and is trying to decide whether to retain and reinvest the cash or pay it out to its shareholders in the form of dividends. The company has 500,000 shares outstanding and a PIE ratio of 20 . If the funds are retained ond reinvested at 12 percent, the company's P/E ratio would increase by 25 percent. On the other hand, f the funds are paid out in the form of dividends, it is expected that the P/E ratio will increase by 15 percent Required: Advise the compony what action they should take and provide colculations to support your recommendation