Company ABCs growth rate in dividends in the following year is anticipated to be 7% and this rate is expected to decrease by 1% per year until it reaches a perpetual rate of 4%.

It has just declared a dividend of $ 3 per share and you want to have a 12 % return by investing in this stock.

the value of the dividend received at the end of Yr 5 is:

Select one:

a. $ 3.57/share

b. $ 3.72/share

c. $ 3.87/share

d. $ 3.40/share

e. $ 4.02/share

the share price at the end of the 4^th year is expected to be:

Select one:

a. $ 48.4/share

b. $ 52.3/share

c. $ 46.5/share

d. $ 50.3/share

e. none of the above