Phobis Co is considering a bid for Danoca Co. Both companies are stock-market listed and are in the same business sector. Financial information on Danoca Co, which is shortly to pay its annual dividend, is as follows: Number of ordinary shares 5 million Ordinary share price (ex div basis) $3.30 Earnings per share 40.0c Proposed payout ratio 60% Dividend per share one year ago 23.3c Dividend per share two years ago 22.0c Average sector price/earnings ratio 10   Calculate the market capitalisation of Danoca Co. A $14.75m B $16.50m C $5.00m D $20.00m

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