If we see in MM approach it says dividend does not affect MPS but when we calculate p1 i.e MPS it is different on the basis of dividend paid and not paid
B*R Retention ratio (b) multiply by internal rate of return (r) (which is return on retained earnings) So that means g= b×r = .70 × .20 =14% in first case.. And ke=15% already given.. According to assumption should be Ke > g Which is proved here