Question: 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
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: 301 00 - $1.50; ke - 10%; 4x Under Plan A the dividend (1) will be increased to $1.80 with x and gunchanged. Under Plan B, the dividend to) will remain at $1.50, K. will remain unchanged, but will increase to 6% 6. Compute the current price under Plan A. (Do not round Intermediate colculations. Round the final answer to the nearest whole dollar) Current price b. Compute the current price under Plan B. (Do not round intermediate calculations, Round the final answer to 2 decimal places.) Current price c. Which plan produced the higher value? O Plan A O Plan B
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