Daniel is trying to determine the reasonable stock price of IBM. He has collected the following information for his analysis:

• Recent earnings per share: $10
• Growth rate of earnings: 2%
• Retention ratio: 80%
• Required rate of return (cost of equity): 6%

According to the forward P/E ratio, the reasonable stock price of IBM should be

a.$10.50.

b.$15.

c.$25.50.

d.$51.

e.None of the above.