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Omni Telecom is trying to decide whether to increase its cash dividend immediately or use the fund to increase its future growth rate. It will

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Omni Telecom is trying to decide whether to increase its cash dividend immediately or use the fund to increase its future growth rate. It will use the dividend valuation model for the purposes of analysis. D0 is currently $2.00,Ke is 10 percent, and g is 5 percent. Under Plan A,D1 would be immediately increased to $2.20 and Ke and g will remain unchanged. Under Plan D,D1 will remain at $2.00 but g will go up to 6 percent and Ke will remain unchanged. a. Compute the price of the stock today under Plan A. (Do not round intermediate calculations.) Share price b. Compute price of the stock today under Plan B. (Do not round intermediate calculations.) Share price c. Which plan will produce the higher value? Plan A Plan B

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