ABC common stock is expected to have have dividends in year 1 of $3/share, year 2 of $3/share,year 3 of $3.2/share, year 4 of $3.4/share, and in year 5 of $3.6/share. Then dividends will grow at a constant rate of 6%.

If the discount rate is 15% , what should be the current share price? Hint: The growing perpetuity (Gordon growth model) should be put into year 5 along with the year 5 dividend before taking the present values.

		$31.16
		$31.80
		$37.42
		$47.77