Saskatchewan Steel, Ltd

Saskatchewan Steel, Ltd. and Alberta Copper, Inc. both recently announced earnings of $400,001. Both companies have common shares outstanding of 250,000 and rates of return of 10%.
Saskatchewan Steel has a new project that will generate net cash flows of $50,000 per year
Forever. Alberta Copper has a new project that will generate net cash flows of $40,000 per year
Forever. The stock price of Saskatchewan Steel should be _______ greater than the stock price of
Alberta Steel.

A) $0.04
B) $0.40
C) $3.60
D) $10,000
E) $100,000