Tough P/E question

Sorry for the late replies guys… the right answer as most of you guessed it is C! Thanks for the explanation…

“A-- can not be right, as ROE > Required rate of return, and investors will like the firm to increase retained earnings (i.e., decrease Dividend payout” EXCELLENT POINT – yes, the firm has projects that throw off a rtn that is > the cost of capital, so it cnanot be A Confirms that the answer is C Overall, this is a VERY tricky question

yes realy tricky- i really did not tell whihnone to pick between A & C