House of Haddock has $5,400$ shares outstanding and the stock price is $$90.$ The company is expected to pay a dividend of $$18$ per share next year, and thereafter, the dividend is expected to grow indefinitely by $5\%$ a year. The president, George Mullet, now makes a surprise announcement: He says that the company will henceforth distribute half the cash in the form of dividends and the remainder will be used to repurchase stock. The firm is expected to generate earnings of $$97,200$ each year. The annual dividend will be paid prior to the stock repurchase.