You Expect KT Industries (KTI) Will Have Earnings Per Share

question 36

Multiple Choice

You expect KT industries (KTI) will have earnings per share of $4 this year and expect that they will pay out $1.75 of these earnings to shareholders in the form of a dividend. KTI's return on new investments is 13% and their equity cost of capital is 10%. The value of a share of KTI's stock today is closest to ________.

• A) $78.14
• B) $39.07
• C) $65.12
• D) $26.05

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