A firm's long term: -Payout ratio is forecast to be 40 percent; -Growth rate of profits and dividends is 3 percent; -Required rate of return on equity is 8 percent. All rates are effective annual. The firm can be valued using the dividend discount model. Calculate the firm's expected leading price-to-earnings ratio.

Select one:

a. 8

b. 12

c. 20

d. 25

e. Not enough information.