RobertA

g=b * ROE
b = (1Div Payout)
if Div Payout Increases  (1b) decreases, b increases
with ROE the same  g = b * ROE increases.
With r the same (rg) decreases  
so numerator E1 * B increases
(rg) in the denominator decreases.
So both factors result in a Valuation increase.