Cork Bottlers Has 84 Million Shares Outstanding and Expects Earnings

Multiple Choice

Cork Bottlers has 84 million shares outstanding and expects earnings at the end of this year of $54 million.Cork plans to pay out 30% of its earnings as a dividend and 10% of its earnings through share repurchases.The firm has an equity cost of capital of 12%.If Tarmac' earnings are expected to grow by 6.5% per year and these payout rates remain constant,what is Tarmac's share price?

A) $5.24
B) $2.14
C) $4.68
D) $3.51
E) $11.69