You Expect KT Industries (KTI)will Have Earnings Per Share of $3

Multiple Choice

You expect KT industries (KTI) will have earnings per share of $3 this year and expect that they will pay out $1.50 of these earnings to shareholders in the form of a dividend.KTI's return on new investments is 15% and their equity cost of capital is 12%.The value of a share of KTI's stock is closest to:

A) $39.25
B) $20.00
C) $33.35
D) $12.50
E) $25.75