Which of the following is/are true if a firm has a required rate of return equal to the ROE?I. The amount of earnings retained by the firm does not affect market price or the P/E. II. The firm can increase market price and P/E by increasing the growth rate. III. The P/E ratio is inversely proportional to the ROE of the firm.

• A. Only (I) above
• B. Both (I) and (II) above
• C. Both (I) and (III) above
• D. Both (II) and (III) above