ABC Company's earnings per share are expected to be $ 4 . 0 0 at t =
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Question:
ABC Company's earnings per share are expected to be $at t Currently ABC Corp. pays out all its earnings as dividends and has a current share price of $In order to expand, ABC decides to cut its dividend from $to $per share and reinvest the retained funds. With the new expansion, ABC's dividends are expected to grow at per year indefinitely. If the reinvestment does not affect ABC's equity cost of capital, what should the share price be as a consequence of this decision?
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