Question $8(7$ points$)$

The stock of Robotic Atlanta Inc. is trading at $$25\mathrm{.}24$ per share. In the past, the firm has paid a constant dividend $($i$.$e$.,g=0)$ of $$4\mathrm{.}86$ per share and it has just paid an annual dividend $($i$.$e$.,D0=4\mathrm{.}86).$ However, the company will announce today new investments that the market did not know about. It is expected that with these new investments, the dividends will grow at $3\mathrm{.}9\%$ forever. Assuming that the discount rate remains the same, what will be the price of the stock after the announcement? $($Round your answer to $2$ decimal places and record your answer without dollar sign or commas$).$

Your Answer:

Answer