The current price of Fukushima Power Co. stock is $32.50 per share. Earnings next year should be $2.5 per share and it should pay a $ 1 dividend. The P/E multiple is 15 times on average in this industry. What price would you expect for the firms stock in the future if you believe the P/E multiple approach is correct?

1. $13.5
2. $22.50
3. $26.50

$37.50