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please help! Omni Telecom is trying to decide whether to increase its cash dividend immediately or use the funds to increase its future growth rate.
please help!
Omni Telecom is trying to decide whether to increase its cash dividend immediately or use the funds to increase its future growth rate.
Price of the stock today
Dividend at the end of the first year
Dividend today
Required rate of return
Constant growth rate in dividends
is currently $ is percent, and is percent.
Under Plan A would be immediately increased to $ and and will remain unchanged.
Under Plan B Do will remain at $ but will go up to percent and will remain unchanged.
a Compute price of the stock today under Plan A Note will be equal to or $ will equal
percent, and will equal percent.
Note: Round your intermediate calculations and final answer to decimal places.
Stock price for Plan A
b Compute price of the stock today under Plan Note will be equal to or $ will be
equal to percent, and will be equal to percent.
Note: Round your intermediate calculations and final answer to decimal places.
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