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Omni Telecom is trying to decide whether to increase its cash dividend immediately or use the funds to increase its future growth rate Po D

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Omni Telecom is trying to decide whether to increase its cash dividend immediately or use the funds to increase its future growth rate Po D Ke-9 Pe = Price of the stock today D1 = Dividend at the end of the first year D1 - Do ( 19) Do - Dividend today Ke- Required rate of return g=Constant growth rate in dividends De is currently $3.50. Ke Is 9 percent, and is 5 percent Under Plan A. would be immediately increased to $400 and K, and will remain unchanged Under Plan B, 0 will remain at $3.50 but g will go up to 6 percent and will remain unchanged a. Compute Pe (price of the stock today) under Plan A Note , will be equal to 0 (1 + ) or $400 (105) K, will equal 9 percent, and g will equal 5 percent (Round your intermediate calculations and final answer to 2 decimal places.) Stock price for Plan A b. Computer price of the stock today) under Plan 8. Note, will be equal to (o) of $350 (106) Ke will be equal to 9 percent and will be equal to 6 percent (Round your intermediate calculations and final answer to 2 decimal places) Stock price for Plan B c. Which plan will produce the higher value? Plan A ni

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