Solution-Price of the stock after the announcement

Price of the stock after the announcement

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Reference no: EM132348755

The stock of Robotic Atlanta Inc. is trading at $ 28.13 per share. In the past, the firm has paid a constant dividend (i.e., g = 0) of $ 4.92 per share and it has just paid an annual dividend (i.e., D0 = 4.92 ). However, the company will announce today new investments that the market did not know about. It is expected that with these new investments, the dividends will grow at 8.6 % forever. Assuming that the discount rate remains the same, what will be the price of the stock after the announcement? (Round your answer to 2 decimal places and record your answer without dollar sign or commas).

Reference no: EM132348755

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Price of the stock after the announcement

Reference no: EM132348755

Reference no: EM132348755

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