The Toronto Maple Laughs annual dividend is $2.75 per share, with the next dividend to be paid one year from today. Currently, dividends are expected to grow by 2% per year. If the current price is $55, what opportunity cost of capital is the market using to price the stock? Management has decided to cut the annual dividend to $2 per share beginning next year to recruit higher quality players. In return, the dividend is expected to grow by 3% per year starting next year. What share price would you expect after the announcement? Is this a positive NPV decision? At what growth rate in dividends would be needed for management to be indifferent between the status quo and the alternative?