What is the value of its stock after the announcement

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A company just announced that it plans to cut its dividend from $1.75 to $1.00 per share and use the extra funds to expand its operations. Prior to this announcement, the company's dividends were expected to grow at 5% per year and its stock was trading at $35.00 per share. With the new expansion, the dividends are expected to grow at 7% per year indefinitely. Assuming that the company's risk is unchanged by the expansion, what is the value of its stock after the announcement?

Reference no: EM132794219

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