Oswego Plumbing Works (ticker: OPW) just announced that it will cut next year's dividend, D,, from $2.25 to $1.00 per share and the firm will use the extra funds to expand operations. Prior to this announcement, OPW's dividends were expected to grow at 5% per year and OPW's common stock was trading at a price of $26.00 /share. With the new expansion, OPW's dividends are expected to grow at 10% per year indefinitely. 

Assuming the overall risk of the firm is unchanged by this expansion, the value of one share of OPW after the announcement is closest to:

Answer rating: 100% (QA)

To calculate the value of one share of OPW after the announcement we can use the G... View the full answer