Evaluate what should the stock price be

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Reference no: EM131959378

JBK, Inc., normally pays an annual dividend. The last such dividend paid was $3.20, all future dividends are expected to grow at 5 percent, and the firm faces a required rate of return on equity of 12 percent.

If the firm just announced that the next dividend will be an extraordinary dividend of $17.70 per share that is not expected to affect any other future dividends, what should the stock price be?

Reference no: EM131959378

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