Tarmac Airlines Has 115 Million Shares Outstanding and Expects Earnings

Multiple Choice

Tarmac Airlines has 115 million shares outstanding and expects earnings at the end of this year of $370 million.Tarmac plans to pay out 40% of its earnings as a dividend and 20% of its earnings through share repurchases.The firm has an equity cost of capital of 8%.If Tarmac' earnings are expected to grow by 3% per year and these payout rates remain constant,what is Tarmac's share price?

A) $38.61
B) $24.13
C) $64.35
D) $25.74
E) $16.09