问题
单项选择题
Assuming that a company's ROE is 12% and the required rate of return is 10%, which of the following would most likely cause the company's P/E ratio to rise（）
A. The inflation rate falls.
B. The firm's dividend payout rises.
C. The firm's ROE falls.
答案
参考答案：A
解析：
The expected inflation rate is a component of ke ( through the nominal risk free rate), ke can be represented by the following: nominal risk free rate + stock risk premium, where nominal risk free rate = [ ( 1 + real risk free rate) ( 1 + expected inflation rate) ] - 1. If the rate of inflation decreases, the nominal risk free rate will decrease, ke will decrease. The spread between ke and g, or the P/E denominator, will decrease. P/E ratio will increase.