Answer the following.

a.

b.

Blockbuster Inc. just paid a dividend of $2 per share. Dividends are expected to grow at a rate of 50% annually over the next three years. After that, it is expected that Blockbuster will cease paying dividends forever. What is the fair market price for a share of Blockbuster ifshareholders require a return of 12%? O A. $1.61 O B. $2.21 O C. $2.95 O D. $1.47 O E. $0