Sunnyfax Publishing Pays Out All Its Earnings and Has a Share

Sunnyfax Publishing pays out all its earnings and has a share price of $38. In order to expand? Sunnyfax Publishing decides to cut its dividend from $3.00 to $2.00 per share and reinvest the retained funds. Once the funds are reinvested, they are expected to grow at a rate of 12%. If the reinvestment does not affect Sunnyfax's equity cost of capital, what is the expected share price as a consequence of this decision?

A) $33.33
B) $50.00
C) $60.00
D) $40.00