A firm has just paid a dividend of $4.40 per share. The dividend is expected to grow at an initial growth rate of 11% per year, but the growth rate will then decline linearly over 12 years to a constant long-term growth rate of 2.8% per year. The cost of equity is 7.2%. What is the value of each share?

Select one:

a. $152.00

b. $201.20

c. $202.32

d. $153.22

Answer is A