If a firm increases its plowback ratio, based on this information solely it can not be determined what will happen to the p/e ratio.
The amount of earnings left over after dividend payments are measured by the plowback ratio, a fundamental analysis ratio.
The retention ratio is the most frequent name for it.
The payout ratio, on the other hand, measures the amount of dividends paid out as a percentage of earnings.
The plowback ratio shows how much profit is kept within a company rather than distributed to investors.
Plowback ratios are typically greater in younger companies.
These businesses are more committed to business expansion and are growing more quickly.
Businesses that are more established rely less on reinvested profits to grow.
Companies that do not pay dividends have a ratio of 100%, while those that distribute all of their net income have a ratio of 0%.
Hence, the answer can not be determined based on the given information.
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