Question: Kay Jay, Inc. is expected to pay its first ever annual dividend one year from now, based on an expected earrings per share of $4.20

Kay Jay, Inc. is expected to pay its first ever annual

Kay Jay, Inc. is expected to pay its first ever annual dividend one year from now, based on an expected earrings per share of $4.20 and a paycut ratio of 40%. Future eamings per share are expected to grow indefinitely at 6% per year, and Kay Jay is expocted to maintain the 40% payout ratio. If Kay Jay's cost of equily capital is 15.50%, at what price should Kay Jay's stock to sell for today? Choose the closest answer. a. 17.68 b. $12.48 c. $8.00 d. 18.75 e. 59.09 t. $12.00 g. $9.45

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