estion 20 Nowe Monday to day am 500m On Sonorary works between 00 AM 700 pm Anaveis required How to do Onto OCO Problem 11-09 The dividend growth model D. (1+) V suggests that an increase in the dividend growth rate will increase the value of a stock. However, an increase in the growth may require an increase in retained earnings and a reduction in the current dividend. Thus, management may be faced with a dilemmar current dividende versus future growth. As of now, investors' required return is 10 percent. The current dividend is $1.55 share and is expected to grow annually by 4 percent, so the current market price of the stock is 526 Management may make an investment that will increase the firm's growth rate to 7 percent, but the investment will require an increase in retained earnings, so the fem dividend must be cut to $1 a share. Should management make the investment and reduce the dividend Round your answer to the rest The value of the stock to to the management select make the investment and decrease the dividend