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In-Class Chapter 18 i Saved 1 Omni Telecom is trying to decide whether to increase its cash dividend or use the funds to increase its future growth rate
In-Class Chapter 18 i Saved 1 Omni Telecom is trying to decide whether to increase its cash dividend or use the funds to increase its future growth rate. It will use the dividend valuation model for purposes of analysis. The current values are the following: 10 points De = $1.50; Ke = 10%; g = 4% Under Plan A, the dividend (01) will be increased to $1.80 with Ke and gunchanged. Under Plan B, the dividend (01) will remain at $1.50, Ka will remain unchanged, but g will increase to 6%. eBook a. Compute the current price under Plan A. (Do not round intermediate calculations. Round the final answer to the nearest whole dollar.) Print Current price 46 b. Compute the current price under Plan B. (Do not round intermediate calculations. Round the final answer to 2 decimal places.) References Current price c. Which plan produced the higher value?
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