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The stock of Robotic Atlanta Inc. is trading at $27.90 per share. In the past, the firm has paid a constant dividend of $4.13 per
The stock of Robotic Atlanta Inc. is trading at $27.90 per share. In the past, the firm has paid a constant dividend of $4.13 per share and it has just paid an annual dividend (i.e., D0 = 4.13). 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 7.3% forever. Assuming that the discount rate remains the same, what will be the price of the stock after the announcement? Calculate your answer to the nearest penny.
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