Problem 18-16 Dividend valuation model and wealth maximization (L018-2] Omni Telecom is trying to decide whether to increase its cash dividend immediately or use the funds to increase is future growth rate Po - D Ke-9 Po = Price of the stock today D1 - Dividend at the end of the first year DD (1 De = Dividend today Ke- Required rate of return g=Constant growth rate in dividends Da is currently $3.00. Kels 8 percent and is 5 percent Under Plan A Do would be immediately increased to $3.40 and Keand o we remain unchanges Under Plan B. Do will remain at $300 but will go up to 6 percent and wicemain unchanged a. Compute pe price of the stock today) under Plan A Note D will be equal to 1-0 $3.40 105) wecual 8 percent and will equal 5 percent (Round your intermediate calculations and final answer to 2 decimal places) Stock price for Pian A Help a. Compute Pe (price of the stock today) under Plan A. Note D, will be equal to 0 (1 + ) or $3.40 (1:05) Ke will equal 8 percent, and g will equal 5 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 D, will be equal to Do - (1 ) or $3.00 (106) Ke will be equal to 8 percent, and g will be equal to 6 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? Plan A Plan B