The dividend-growth model suggests that an increase in the dividend growth rate will increase the value of a stock. However, an increase in the growth retained earnings and a reduction in the current dividend. Thus, management may be faced with a dilemma: current dividends versus future growth. As of now, investors required return is 12 percent. The current dividend is $1.5 a share and is expected to grow annually by S percent, so the current market price of the stock is $22.5. Management may make an investment that will increase the firm's growth rate to 8 percent, but the investment will require an increase in retained earnings, so the firm's dividend must be cut to $1.3 a share. Should management make the investment and reduce the didend Round your answer to the nearest cent. The value of the stock to me he etent an ddend , so the declines