Omni Telecom is trying to decide whether to increase its cash dividend immediately or use the funds to increase its future growth rate. Po = D1 Ke - 9 Po = Price of the stock today D1 = Dividend at the end of the first year D1 = Do (1 + g) Do = Dividend today Ke = Required rate of return g=Constant growth rate in dividends Do is currently $2.20, ke is 12 percent, and g is 4 percent. Under Plan A, Do would be immediately increased to $2.80 and Ke and g will remain unchanged. Under Plan B, Do will remain at $2.20 but g will go up to 5 percent and Ke will remain unchanged. a. Compute Po (price of the stock today) under Plan A. Note D1 will be equal to Do * (1 + g) or $2.80 (1.04). Ke will equal 12 percent, and g will equal 4 percent. (Round your intermediate calculations and final answer to 2 decimal places.) Stock price for Plan A b. Compute Po (price of the stock today) under Plan B. Note D1 will be equal to Do (1 + g) or $2.20 (1.05). Ke will be equal to 12 percent, and g will be equal to 5 percent. (Round your intermediate calculations and final answer to 2 decimal places.) Stock price for Plan B c. Which plan will produce the higher value? O Plan B O Plan A Omni Telecom is trying to decide whether to increase its cash dividend immediately or use the funds to increase its future growth rate. Po = D1 Ke - 9 Po = Price of the stock today D1 = Dividend at the end of the first year D1 = Do (1 + g) Do = Dividend today Ke = Required rate of return g=Constant growth rate in dividends Do is currently $2.20, ke is 12 percent, and g is 4 percent. Under Plan A, Do would be immediately increased to $2.80 and Ke and g will remain unchanged. Under Plan B, Do will remain at $2.20 but g will go up to 5 percent and Ke will remain unchanged. a. Compute Po (price of the stock today) under Plan A. Note D1 will be equal to Do * (1 + g) or $2.80 (1.04). Ke will equal 12 percent, and g will equal 4 percent. (Round your intermediate calculations and final answer to 2 decimal places.) Stock price for Plan A b. Compute Po (price of the stock today) under Plan B. Note D1 will be equal to Do (1 + g) or $2.20 (1.05). Ke will be equal to 12 percent, and g will be equal to 5 percent. (Round your intermediate calculations and final answer to 2 decimal places.) Stock price for Plan B c. Which plan will produce the higher value? O Plan B O Plan A