Bleak Holdings just announced it will cut its dividend from $4 to $2.50 per share

| June 14, 2018

Bleak Holdings just announced it will cut its dividend from $4 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% rate, and its share price was $50. With the new expansion, Cooperton’s dividends are expected to grow at a 5% 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?

Order your essay today and save 20% with the discount code: ESSAYHELP
Order your essay today and save 20% with the discount code: ESSAYHELPOrder Now