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5 points Saved Stratos Inc. only pays dividends to its shareholders. The company currently pays out 75% of its earnings in the form of dividends. The company is considering expanding into a new product line. Without the new product line earnings per share (EPS) at the end of the year are expected to be $10 and are expected to grow at 5% annually in perpetuity. To finance the investment in the new product line the company will need to permanently cut its dividend payout ratio to 60% With the new product line earnings per share (EPS) at the end of the year are expected to be $10 and are expected to grow at 6.2% annually in perpetuity. The firm's cost of equity capital (re)is 15%. Should the company reduce its dividend to invest in the new product line? Select the best answer ol. Yes, because investing in the new product line will increase the share price Oll. Yes, because investing in the new product line will reduce the share price: O.. No, because investing in the new product line will increase the share price IV No, because investing in the new product line will reduce the share prico