Aaron Inc. has

328

million shares outstanding. It expects earnings at the end of the year to be

$576

million. The firm's equity cost of capital is

10%.

Aaron pays out 50% of its earnings in total: 30% paid out as dividends and 20% used to repurchase shares. If Aaron's earnings are expected to grow at a constant

5%

per year, what is Aaron's share price?

A.

$35.12

B.

$26.34

C.

$17.56

D. $8.78