Sunnyfax Publishing pays out all its earnings and has a share price of $35.00. 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 14%.

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.

$35.43

B.

$60.73

C.

$50.61

D.

$ 40.49