Question: Cooperton Mining just announced it will cut its dividend from $4.00 to $2.50 per share and use the extra funds to expand. Prior to the

Cooperton Mining just announced it will cut its dividend from $4.00 to $2.50 per share and use the extra funds to expand. Prior to the announcement, Cooperton's dividends were expected to grow at a 3.0% rate, and its share price was $50.00. With the new expansion, Cooperton's dividends are expected to grow at a 5.0% rate. What share price would you expect after the announcement? (Assume Cooperton's risk is unchanged by the new expansion.) Is the expansion a positive NPV investment? The equity cost of capital is ___? Now, using the new dividend structure, we have _____ Is the expansion a positive NPV investment?

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