In practice, a common way to value a share of stock when a company pays dividends is to value the dividends over the next 5 years or so, then find the terminal stock price using a benchmark PE ratio. Suppose a company just paid a dividend of $2.00. The dividends are expected to grow at 10 percent over the next 5 years. In 5years, the estimated payout ratio is 30 percent and the benchmark PE ratio is 20. What is the target stock price in 5 years?

a. $64.42

b. $97.94

c. $133.33

d. $214.74