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johnpaech johnpaech
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6 years ago
JRN Enterprises just announced that it plans to cut its dividend from $2.50 to $1.50 per share and use the extra funds to expand its operations.  Prior to this announcement, JRN's dividends were expected to grow at 4% per year and JRN's stock was trading at $25.00 per share.  With the new expansion, JRN's dividends are expected to grow at 8% per year indefinitely.  Assuming that JRN's risk is unchanged by the expansion, the value of a share of JRN after the announcement is closest to:
A) $25.00
B) $15.00
C) $31.25
D) $27.50
Textbook 
Corporate Finance: The Core

Corporate Finance: The Core


Edition: 4th
Authors:
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anicidanicid
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johnpaech Author
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#2
5 years ago
Thanks for helping with my corporate finance course
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