4. Value Maximization (30 points total) Assume that time is discrete with two periods t = 1,2. There is no uncertainty. A firm maximizes its value - D2. 1 +r where D, is the firm's dividend in period t and r is the exogenous real interest rate. Profits, output net of labor costs, for the firm are given by I12 = 02K2 Above the profitability indexes d and 62 are taken as given by the firm, the capital elasticity satisfies 0 0, which stands for capital utilization, is chosen by the firm. If a firm invests In in period 1 and chooses to utilize its capital stock in the amount , capital in period 2 is given by K2 = (1 - 6)Ki + h -d(u). Here, the depreciation rate satisfies 0