Sunnyfax Publishing pays out all its earnings and has a share price of

$37.00.

In order to expand, Sunnyfax Publishing decides to cut its dividend from $3.00 to $2.00 per share and reinvest the retained funds. Once the funds are reinvested, they are expected to grow at a rate of

13%.

If the reinvestment does not affect Sunnyfax's equity cost of capital, what is the expected share price as a consequence of this decision?

A.

$36.67

B.

$62.86

C.

$41.90

D.