JRN Enterprise

Dividend $3-$1.50

Grow 4% indefinitely

Share: $25.50

Expected growth: 8%

Risk unchanged

Value is ?

JRN Enterprises just announced that it plan's to cut its dividend from $3.00 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 indefinitely at 4% per year and JRN's stock was trading at \$25.50 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