Kinston Industries Just Announced That It Will Cut Its Dividend

Multiple Choice

Kinston Industries just announced that it will cut its dividend from $3.00 to $2.00 per share and use the extra funds to expand its operations.Kinston's dividends were expected to grow at a 2% rate,and its share price was $37.50.With the new expansion,Kinston dividends are expected to grow at a 5% rate.Kinston's share price following this announcement should be:

A) $20.00.
B) $30.00.
C) $37.50.
D) $40.00.