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Please help me find A & B. thank you Omni Telecom is trying to decide whether to increase its cash dividend immediately or use the

Please help me find A & B. thank you

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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. D1 P0 = K9 _ g P0 = Price of the stock today D1 = Dividend at the end of the rst year D1 = D0 x (l + g) D0 = Dividend today Ke = Required rate of return g= Constant growth rate in dividends D0 is currently $2.00, Ice is 10 percent, and g is 5 percent. Under Plan A, 130 would be immediatelyincreased to $2.20 and K6 and gwill remain unchanged. Under Plan B, Do will remain at $2.00 but 9 will go up to 6 percent and Ke will remain unchanged. a. Compute Po (price of the stock today) under Plan A. Note 131 will be equal to Do x (1 + g) or $2.20 (1.05). K9 will equal 10 percent, and gwill equal 5 percent. (Round your intermediate calculations and final answer to 2 decimal places.) Stock price for Plan A _ b. Compute P0 (price ofthe stock today) under Plan B. Note D1 will be equal to D0 x (1 + g) or $2.00 (1.06). Ke will be equal to 10 percent, and gwill be equal to 6 percent. (Round your intermediate calculations and final answer to 2 decimal places.) Stock price for Plan B _

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