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ABC Company's earnings per share are expected to be $ 4 . 0 0 at t = 1 . Currently, ABC Corp. pays out all

ABC Company's earnings per share are expected to be $4.00 at t =1. Currently, ABC Corp. pays out all its earnings as dividends and has a current share price of $40. In order to expand, ABC decides to cut its dividend from $4.00 to $2.00 per share and reinvest the retained funds. With the new expansion, ABC's dividends are expected to grow at 6% per year indefinitely. If the reinvestment does not affect ABC's equity cost of capital, what should the share price be as a consequence of this decision?
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