Bruin Inc. has recently announced a $4.5 EPS. Earnings are expected to grow at 5 percent per year forever. The company will not pay dividends on the stock over the next 5 years.

However, it will pay 30% of its earnings as dividend starting in year 6. The payout ratio will remain at 30% forever. Earnings will continue to grow at the same 5% rate.

If the required rate of return on this stock is 15 percent, what is the current share price according to the dividend growth model?

Select one:

a. 0.90

b. 4.50

c. 0.78

d. 8.99

e. 7.82