The stock of AMD Graphics Co. paid a dividend of $0.6 per share last year on earnings of $1.00 per share. The firms dividends and earnings are expected to growth at 7% per year forever. Shareholders require a return of 10% on their investment. Assuming the payout ratio is constant, the justified leading P/E ratio is:

a. 20.0 b. 12.0 c. 12.8 d. 9.0 e. 8.6