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If ROE < k, then which of the following statement is correct Question 1 options: The stock price is unaffected by the plowback ratio. Investors

If ROE < k, then which of the following statement is correct

Question 1 options:

The stock price is unaffected by the plowback ratio. Investors are indifferent.

Investors prefer that they reinvest earnings in the firm at an inadequate rate of return rather than payout earnings as dividends

The firm offers superior investment opportunities

The value of the firm decreases as plowback ratio b increases

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