7. Chapter b Multiple Choice 07-84 Algorithmic, Section b Multiple Choice 07-84 Algorithmic, Problem b Multiple Choice 07-84 Algorithmic Sawchuck Consulting has been profitable for the last 5 years, but it has never paid a dividend. Management has indicated that it plans to pay a $0.25 dividend 3 years from today, then to increase it at a relatively rapid rate for 2 years, and then to increase it at a constant rate of 8.00% thereafter. Management's forecast of the future dividend stream, along with the forecasted growth rates, is shown below. Assuming a required return of 11.00%, what is your estimate of the stock's current value? Year 1 2 3 4 5 6 7 Growth rate NA NA NA NA 85% 42.5% 8.00% 8.00% Dividends $0.000 $0.000 $0.000 $0.25 $0.46 $0.66 $0.71 $0.77 Use the rounded values of dividends (as given in the table above) for your subsequent calculations. Select the correct answer. O a. $25.92 O b. $27.42 c. $14.92 Od. $26.92 Oe. $26.42