Lynott is a Dublin-based company that manufactures heavy-duty linoleum for factory floors. Suppose that investors require a real rate of return of 5.0% on equity in Lynott, and that the firm retains 20%

of its earnings, which are reinvested at a real rate of return of 10%.

The P/E ratio for the firm consistent with the above data would be determined as

a. 20.0

b. 27.2

c. 30.0

d. 30.2