Cups N Saucers, Inc. normally pays a annual dividend. The last such dividend paid was $1.00, all future annual dividends are expected to grow at 7 percent, and the firm faces a required rate of return on equity of 15 percent. If the firm just announced that the next dividend will be an extraordinary dividend of $3.00 per share that is not expected to affect any other future dividends, what should the stock price be?

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The Answer of Cups N Saucers, Inc. normally pays a annual dividend. The last such dividend paid was $1.00, all future annual dividends are expected to grow at 7 percent, and the firm faces a required rate of return on equity of 15 percent. If the firm just announced that the next dividend will be an extraordinary dividend of $3.00 per share that is not expected to affect any other future dividends, what should the stock price be?