Question: Knox Inc. is deciding between the two dividend payment plans below: Year 1 2 3 Plan A $3.00 $3.05 $3.10 $3.15 Plan B $0.50 $1.75

Knox Inc. is deciding between the two dividend payment plans below:

Knox Inc. is deciding between the two dividend payment plans below: Year 1 2 3 Plan A $3.00 $3.05 $3.10 $3.15 Plan B $0.50 $1.75 $3.25 $6.80 Stockholders are expected to discount Plan A by 12% and Plan B by 14%. Based upon the present value of the future dividends, which plan will the stockholders prefer? Select one: O A. Plan A B. Plan B C. Either, since both plans pay equal total dollar amounts. O D. Neither, since the dividend payout ratios are the same

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