Technium, a technology firm specializing in cloud computing, is planning an initial public offering. Technium has a book value of equity of 80 million and is estimated that will earn 20 million in net income by the end of next year. Considering that the firm has a cost of equity of 15% and expects to grow 5% a year forever, we would expect the company to trade with a price to book value ratio of:

Select one:

a. None of the proposed answers are correct

b. 1.5

c. 2.4

d. 2

e. 1.3