1. Circuit City currently has earnings of $2.50 per share, and has a dividend payout ratio (D₀/E₀) of 20 percent. Dividends are expected to grow at a constant rate of 6 percent per year. The required rate of return is 15 percent. The current share price would be estimated at:

   	A.	$27.78
   	B.	$5.56
   	C.	$5.89
   	D.	There is not enough information to answer the question.
   	E.	None of the above