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4. An analyst estimates that today (t=0) the benefits per share of the firm CICISA will be 40 in the first year (t=1), and 50

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4. An analyst estimates that today (t=0) the benefits per share of the firm CICISA will be 40 in the first year (t=1), and 50 in the second year (t=2). He predicts that after the second year benefits will grow at 2% in perpetuity. Historically, the pay-out of this firm has been 55%, and it is not assumed to change in the future. What should be the market price of these stocks? Assume that the cost of capital is 9% for this type of firms. a. The price will be 125.30 euros. b. The price will be 350.84 euros. C. The price will be 380.60 euros d. None of the above

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