[Solved] Which of the following statements is TRUE

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Which of the following statements is TRUE? a. Positive retention ratio b>0 implies PVGO>0 b. Retention ratio is the percentage of earnings that is paid

Which of the following statements is TRUE?

a.
Positive retention ratio b>0 implies PVGO>0

b.
Retention ratio is the percentage of earnings that is paid out as dividends

c.
The formula V₀ = E₁ / k assumes that the firm reinvests all of its earnings perpetually and pays no dividends.

d.
Present value of growth opportunities depends on the relationship between ROE and required rate of return

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	a.	Positive retention ratio b>0 implies PVGO>0
	b.	Retention ratio is the percentage of earnings that is paid out as dividends
	c.	The formula V₀ = E₁ / k assumes that the firm reinvests all of its earnings perpetually and pays no dividends.
	d.	Present value of growth opportunities depends on the relationship between ROE and required rate of return