Corporation just paid a dividend of $2.00 a share (that is , D₀ = $2.00). The dividend is expected to grow at 9% per year for the next 3 years and then at 4% a year thereafter.

10. What are the expected dividends for years 1-4.

a. D1= 2.18, D2=2.38, D3=2.59, D4=2.69

b. D1= 2.48, D2=2.18, D3=2.79, D4=2.69

c. D1= 2.78, D2=2.38, D3=2.59, D4=2.19

d. D1= 2.69, D2=2.59, D3=2.38, D4=2.18

11. Calculate the price of the stock at time 3 (P₃ = D₄/(r-g)). Assume a required return of 11% (r). (Use original value to compute P₃.)

a. $48.99

b. $32.04

c. $28.48

d. $38.48

e. $19.99