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Suppose we have complete capital markets ( that is , we are in a Modigliani - Miller world without imperfections ) . A firm has

Suppose we have complete capital markets (that is, we are in a Modigliani-Miller world without imperfections). A firm has pledged to pay a $5 per share annual dividend forever. Its cost of equity is 25% and there are 600 outstanding shares. The firm is considering issuing 250 new shares to fund an increase only in the first dividend (the dividend goes back to $5 per share afterward). What is the firm's share price one day before the first dividend is paid if the firm issues the new shares?
Group of answer choices
$25.00
$55.00
$21.67
$30.00
$38.33

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