JRN Enterprises just announced that it plans to cut itsnext-year dividend, D1, from $2.50 to $1.50 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 $25.50 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.

$25.50

B.

$39.43

C.

$65.72

D.