Chain Reaction Company pays $2.75 today in dividends. They have a current growth rate of 35% and expect it to be 12% after 4 years of abnormal growth. Then it is expected to remain 12% forever. If the required rate of return is 15%, what is the price of the stock using a two-stage inconsistent growth model with an assumption of the growth rate linearly decreasing over the first four years using an H model?

The dividend is $2.75 at time 0, so we will grow it by 35% in year 1.

It will take 4 years of abnormal changes in growth to reach 12%.

12% will be the growth rate in year 5

We want the price in year 4

We will need t find the dividend in year 5

We will use 4 years of dividends from abnormal growth

A.	$99.75
B.	$1143.22
C.	$152.77
D.	$163.69