A late penalty of 10% will apply to new answers Intro Boston Bakery's current dividend policy is to pay out 80% of earnings as dividends. It just paid an annual dividend of $2.58 per share and dividends are expected to grow by 2% per year. The required rate of return is 12%. IB Attempt 1/10 for 9 pts Part 1 What is the value of the stock? 1+ decimals Submit Part 2 Attempt 1/10 for 9 pts The company is now considering changing its dividend policy and reinvesting 90% of its earnings for faster growth in the future. Under the new policy, the company expects dividends to grow by 9% per year. However, reinvesting more funds implles paying out less to shareholders, so the last dividend would have been only $0.32 under the new policy What is the value of the stock under the new policy? 1+ decimals Submit Attempt 1/4 for 9 pts. Part 3 What should the company do? Keep the existing policy Change to the new policy