You are trying to determine the optimal dividend policy for your all equity financed

company using a PE multiples approach. You consider your company to be a stable

growth rate firm. Your return on reinvested earnings is $14\%$ and your required rate of

return on equity is $20\%.$ You have two choices: $($i$)$ pay a $90\%$ dividend; or $($ii$)$ pay a

$70\%$ dividend. Which dividend policy maximizes the value of the company's stock?

a$)90\%$ dividend because it leads to a lower PE multiple

b$)90\%$ dividend because it leads to a higher PE multiple

c$)70\%$ dividend because it leads to a lower PE multiple

d$)70\%$ dividend because it leads to a higher PE multiple