In class we talked about the choice that a firm faces regarding net income. They can pay the earnings out as a dividend or retain the earnings wat in the firm to support firm rowth. Most firms actually pay out some and retain some, thereby voiding an or nothing approach Think about the relationship between the market rate of return and the return from the firm's internal investment opportunities (ROE). How does this relationship affect the firm's decision whether to pay out dividends or not? all else is held constant, explain the expected movement of the stock price given the sout decision and the relationship between the above-described returns tv and ROE") Give a numerical example to support your answer above. Use your own assumptions for "ROE. Then change the payout ratio while using the dividend discount model to show whether value is affected. HTML H x