Question
JRN Enterprises just announced that it plans to cut its dividend from $ 2.75 to $ 1.30 per share and use the extra funds to
JRN Enterprises just announced that it plans to cut its dividend from
$ 2.75 to $ 1.30 per share and use the extra funds to expand its operations. Prior to this announcement, JRN's dividends were expected to grow at 4% per year and JRN's stock was trading at $ 25.00 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 theexpansion, the value of a share of JRN after the announcement is closest to:
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Mathematical Control Theory And Finance
Authors: Andrey Sarychev, Albert Shiryaev, Manuel Guerra, Maria Do Rosário Grossinho
2008th Edition
3540695311, 978-3540695318
