Company just reported Earning Per Share of $50.00 (EPS0=$50) Management plans to continue to payout 20% of net income in the form of dividends Before implementing any cost cutting initiatives, management expects earnings will continue to grow at a long term sustainable growth rate of10.0% every year in perpetuity The companys cost of equity is 25%

Through cost savings, Companys management has a plan to increase ROE by 2.5%. Note this will also cause the earnings growth to increase. Recalculate the sustainable long-term growth rate. Using the Dividend Discount Model for constant growth, the value of Company per share is closest to: a) $86

b) $90

c) $115

d) $215

e) $240