单选题 Assume that the expected dividend growth rate (g) for a firm decreased from 5% to zero. Further, assume that the firm's cost of equity (k) and dividend payout ratio will maintain their historic levels. The firm's P/E ratio will most likely:
A. become undefined. B. increase. C. decrease.

【正确答案】 C

【答案解析】The P/E ratio may be defined as: Payout ratio/(k-g), so if k is constant and g goes to zero, the P/E will decrease.