Solve this please, **Will Rate**

JRN Enterprises just announced that it plans to cut its dividend from $3.00 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 indefinitely at 4% per year and JRN's stock was trading at $25.50 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 Solution Hint: Step 1: Before the expansion, $25.50=$3.00/(rE4%). Find rE. Step 2: Find the stock value after new expansion: P=$1.5/(rE8%). $19.32 $12.75 $38.63 $25.50