Barilla Group just reported $4.5 EPS. Net income will grow at 3 percent per year forever. Barilla will pay no dividends for the next 5 years.

It will pay 20% of its earnings as dividend forever starting in year 6.

The required rate of return on this stock is 13 percent. What should be the stock price?

Select one:

a. 2.92

b. 0.52

c. 5.16

d. 0.58

e. 5.83

Barilla Group just reported $4.5 EPS. Net income will grow at 3 percent per year forever. Barilla will pay no dividends for the next 5 years. It will pay 20% of its earnings as dividend forever starting in year 6. The required rate of return on this stock is 13 percent. What should be the stock price? Select one: a. 2.92 O b. 0.52 c. 5.16 O d. 0.58 O e. 5.83