Question 1 It is 31 January 2023 and the managers of Top Plc. are considering a change in the companys dividend policy. Earnings per share for 2022 for the company were 60p, and the finance director has said that he expects this to increase to 65p per share for 2023. The increase in earnings per share is in line with market expectations of the companys performance. The pattern of recent dividends, which are paid on 31 December is as follows: Year 2022 2021 2020 2019 2018 2017 Dividend per Share (pence) 30.0 28.7 25.1 23.8 21.2 20.5 The managing director has proposed that 65 per cent of earnings in 2023 and subsequent years should be retained for investment in research and development. It is expected that, if this proposal is accepted, the dividend growth rate will be 8.75 per cent. XYZs cost of capital is estimated to be 10 per cent. Calculate the share price of Top Plc in the following circumstances. (a) The company decides not to change its current dividend policy. (b) The company decides to change its dividend policy as proposed by the managing director and announces the change to the market. (c) Is dividend policy relevant to shareholder value? There are two camps among the academics on this question, and empirical findings have provided conflicting evidence on whether dividend policy matters or not. Critically analyse and evaluate the differing theoretical viewpoints, ensuring the response is supported by relevant academic research in this area

please use gordon growth model to solve for part a and b