The next year earnings per share for stock EFH is $1.50 (EPS₁ = $1.50). The next year dividends per share for stock EFH is $1.00 (DPS₁ = $1.00). Stock EFHs Return on Equity is 9% annually and its Required Return (cost of equity capital) is 7% annually.

What is the value of EFHs stock's price per share today, given its prevailing dividend policy, based on the constant growth model?

$12.50

b.

$25.00

c.

$14.29

d.

$37.50