Shareholders in Sarif Industries require a rate of return on their investment of 10.2%. Investors expect Sarif to have EPS one year from now of $5.62. Sarif currently reinvests 21% of its earnings each year and its dividends are expected to grow at an annual rate of 4.9% in perpetuity.

If shares in Sarif Industries are priced correctly, its P/E ratio will be _________.

Select one:

a. 14.91

b. 4.16

c. 4.05

d. 19.79

e. 15.64