A company currently pays a dividend of $2.00 per share (i.e., D₀=$2.0). It is estimated that company's dividend will grow at a rate of 20% per year for the next three years, and the the dividend will grow at a constant rate of 4% thereafter. The company's stock has a beta of 1.5, the risk-free rate is 6%, and the market return is 12.50%. What is your estimate of the company's stock price at the end of year 3 (i.e., P₃)?

1.$35.00

2.$30.536

3.None of the answers given are correct.

4.$37.569

5.$25.00