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Cooperton Mining just announced it will cut its dividend from $ 3.88 to $ 2.71 per share and use the extra funds to expand. Prior
Cooperton Mining just announced it will cut its dividend from $ 3.88 to $ 2.71 per share and use the extra funds to expand. Prior to the announcement, Cooperton's dividends were expected to grow at a 3.5 % rate, and its share price was $ 48.79 . With the planned expansion, Cooperton's dividends are expected to grow at a 4.9 % rate. What share price would you expect after the announcement? (Assume that the new expansion does not change Cooperton's risk.) Is the expansion a good investment?
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