Clonly Corp's Stock Pays a Dividend of $1

Multiple Choice

Clonly Corp's stock pays a dividend of $1.40 and is currently selling for $25, but has not grown in several years. Management feels that 10% growth is possible if the firm discontinues its dividend entirely. Harry owns 6,000 and wants to maintain a constant income stream. How many shares will he have to sell to make up for the first unpaid dividend if Clonly stops paying dividends and starts growing at 10%? Ignore transaction costs and taxes.

A) 305
B) 336
C) 240
D) 280