ABC Inc. just paid dividend D ₀, and it is expecting both earnings and dividends to grow by 0% in Year 2, by 5% in Year 3, and at a rate of 10% in Year 4 and thereafter. The required return on Modular is 15%, and it sells at its equilibrium price, P ₀ = $49.87. What is the expected value of the next dividend, D ₁?

A. It cannot be estimated without more Data.

B. $1.35

C.$1.85

D. $2.35

E. $2.85