Question: Suppose Roget's Search Engine, from the previous problem, decides to forgo the dividend payments in Years 1 and 2 and instead reinvest the funds in

  1. Suppose Roget's Search Engine, from the previous problem, decides to forgo the dividend payments in Years 1 and 2 and instead reinvest the funds in additional projects available to the firm. Demonstrate whether or not the suspension of dividends is appropriate under the following assumptions:
    1. Reinvested funds earn 8 percent.
    2. Reinvested funds earn 10 percent.
    3. Reinvested funds earn 12 percent.

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