1. A stock is expected to pay a dividend of $0.50 at the end of the year (D₁=0.50), and it should continue to grow at a constant rate of 5% a year. If its required return is 12%, what is the stocks expected price 3 years from today?

a. $6.76

b. $7.03

c. $7.31

d. $8.27

e. $8.68