Under which of the following scenarios will increasing the payout ratio for a firm increase its equity
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Question:
Under which of the following scenarios will increasing the payout ratio for a firm increase its equity value?
A) Never
B) Always
C) When the return on equity is equal to its cost of equity
D) When the return on equity is less than the cost of equity
E) When the return on equity is greater than the cost of equity
WHY? Could I please have the explanation. Thank you
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