JRN Enterprises just announced that it plans to cut its dividend from $ 2.00 to $ 1.30 per share and use the extra funds to expand its operations. Prior to thisannouncement, JRN's dividends were expected to grow at 6% per year andJRN's stock was trading at $ 26.00 per share. With the newexpansion, JRN's dividends are expected to grow at 12% per year indefinitely. Assuming thatJRN's risk is unchanged by theexpansion, the value of a share of JRN after the announcement is closestto:

A.

$ 118.20

$118.20

B.

$ 26.00

$26.00

C.

$ 16.90

$16.90

D.