According to the Dividend Discount Model (DDM), if a firm increases its retention rate what happens to the firm's share price assuming no earnings growth?

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The Dividend Discount Model assumes that the firm's share price is based on the present value of its future dividends. If the retention rate increases, it means that the firm is keeping more earnings and paying fewer dividends. This leads to a lower dividend payout and hence a lower present value of future dividends, resulting in a decrease in share price. Assuming no earnings growth, the stock price will decrease due to the decrease in dividends paid out.

According to the Dividend Discount Model (DDM), If a Firm