Now suppose it was not necessary to retain any of the operating income in the business. Relative to a scenario in which retentions are required, what would be the effect of not retaining income on the estimated equity value of the company?

a. Estimated value would increase. b. Estimated value would decrease.

c. Estimated value would not change.

d. Estimated value would be more uncertain.

e. The effect cannot be determined from the information provided.