Low Tech Chip Company Is Expected to Have EPS of $2.50

Multiple Choice

Low Tech Chip Company is expected to have EPS of $2.50 in the coming year. The expected ROE is 14%. An appropriate required return on the stock is 11%. If the firm has a dividend payout ratio of 40%, the intrinsic value of the stock should be

A) $22.73.
B) $27.50.
C) $28.57.
D) $38.46.