Investment

The common stock of Brook Myers, Inc. is selling for $38.50 a share and pays dividends annually. There are 15,000 shares outstanding. The firm has a target retention ratio of .7 and a tax rate of 35 percent. Dividend income is taxed at 15 percent. The company is paying a $1.06 per share dividend today. After the dividend, you would expect the stock price to be Litt and the price-earnings ratio to be Select one: O a. $37.60; 10.90 O b. $37.60: 24,83 C. $38.50: 10.64 d. $37.60, 10.64 e. $38.50; 24.83