Anonymous
Anonymous asked in Business & FinanceInvesting · 1 decade ago

Please someone kind enough answer this Finance question? thanks!?

6. JRN Enterprises just announced that it plans to cut its dividend from $2.50 to $1.50 per share

and use the extra funds to expand its operations. Prior to this announcement, JRN's dividends

were expected to grow at 4% per year and JRN's stock was trading at $25.00 per share. With the

new expansion, JRN's dividends are expected to grow at 8% per year indefinitely. Assuming

that JRN's risk is unchanged by the expansion, the value of a share of JRN after the

announcement is closest to:

A) $25.00

B) $15.00

C) $31.25

D) $27.50

2 Answers

Relevance
  • 1 decade ago
    Favorite Answer

    E) I don't know

  • 1 decade ago

    How bout you stop being a lazy beezy and do your own homework.

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