Cost of capital = $3/Sunnyfax Publishing pays out all its earnings and has a share price of $37. In order to expand, Sunnyfax Publishing decides to cut its dividend from $3.00 to $2.00 per share and reinvest the retained funds. Once the funds are reinvested, they are expected to grow at a rate of 13%. If the reinvestment does not affect Sunnyfax's equity cost of capital and earnings before the dividend cut were expected to be constant, what is the expected share price as a consequence of this decision?

$37 = 0.08108108 ;

g = (3-2)/3 0.13 = 0.0429;

P0=$2/(0.08108108 -0.0429)=$ 52.38

can you spell out the formulas for this?