Wendy and Peter are unsure how to interpret the P/E ratio. After some head scratching, theyve come up with the following expression for the P/E ratio: P 0/ E 1 = (1 b) / R (ROE b) Beginning with the constant dividend growth model, verify this result. What does this expression imply about the relationship between the dividend payout ratio, the required return on the stock, and the companys ROE?