1. Colgate-Palmolive Company currently has a stock price of $60 per share and a dividend payout rate of 100%. It expects to pay an annual dividend of $5.40 per share at the end of this year. Suppose Colgate could cut its dividend payout rate to 70% for the foreseeable future and use the retained earnings to invest in new products. The return on these investments is expected to be 12%. Should Colgate go ahead and cut the dividend payout rate? Explain. [5 points]