Cooperton Mining just announced it will cut its dividend from
$3.93
to
$2.66
per share and use the extra funds to expand. Prior to the announcement, Cooperton's dividends were expected to grow at a
3.1%
rate, and its share price was
$48.65.
With the planned expansion, Cooperton's dividends are expected to grow at a
4.8%
rate. What share price would you expect after the announcement? (Assume that the new expansion does not change Cooperton's risk.) Is the expansion a good investment?
The New Price for Cooperton's stock will be $___(Rounf to the nearest cent.)