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Omni Telecom is trying to decide whether to increase its cash dividend immediately or use...

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Omni Telecom is trying to decide whether to increase its cash dividend immediately or use the funds to increase its future growth rate. D1 Ke-g Po Po Price of the stock today D1 Dividend at the end of the first year D1 Do x (1+g) Do Dividend today Ke Required rate of return g= Constant growth rate in dividends Do is currently $2.90, Ke is 9 percent, and g is 5 percent. Under Plan A, Do would be immediately increased to $3.20 and Ke and g will remain unchanged. Under Plan B, Do will remain at S2.90 but g will go up to 6 percent and Ke Will remain unchanged. a. Compute Po (price of the stock today) under Plan A. Note D1 will be equal to Do x (1 + g) or $3.20 (1.05). Ke Will equal 9 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 D1 will be equal to Do x (1 + g) or $2.90 (1.06). Ke Will be equal to 9 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

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