A firm's earnings per share increased from $10 to $12, its dividends increased from $4 to $4.40, and its share price increased from $80 to $100. Given this information, it follows that ________.

A) the stock experienced a drop in its P/E ratio
B) the company had a decrease in its dividend payout ratio
C) both earnings and share price increased by 20%
D) the required rate of return increased

P/E Ratio

The price-to-earnings ratio, a valuation metric that compares the current share price of a company to its per-share earnings, used to evaluate if a stock is over or undervalued.

Dividend Payout Ratio

A financial metric that measures the percentage of a company's earnings paid out to shareholders as dividends.

Earnings Per Share

Earnings per share (EPS) is a company's profit divided by the outstanding shares of its common stock, indicating the company's profitability on a per-share basis.