ABC, Inc., is a young start-up company. No dividends will be paid on the stock over the next nine years, because the firm needs to plow back its earnings to fuel growth. The company will then pay a $12 per share dividend in year 10 and will increase the dividend by 5 percent per year thereafter. If the required return on this stock is 13 percent, what is the share price three years from today? 1) $56.42 2) $63.76 3) $72.05 4) $150.00

ABC, Inc., is a young start-up company. No dividends will be paid on the stock over the next nine years, because the firm needs to plow back its earnings to fuel growth. The company will then pay a $12 per share dividend in year 10 and will increase the dividend by 5 percent per year thereafter. If the required return on this stock is 13 percent, what is the share price three years from today? 1) $56.42 2) $63.76 3) $72.05 4) $150.00