Jeffery has collected data on ABC plc as of December $31,2017.$ The firm pays a dividend

at the end of each year. After analysing competitive pressures and financial conditions in

the industry, he predicts that ABC plc will lose market share because of new entrants, but

will stabilize within a few years. The required rate of return for ABC plc is $8\%.$ Beginning

with a per share dividend of $3\mathrm{.}15$ in $2017,$ he develops a scenario regarding the growth of

dividends of the firm. The scenario is summarized below and presented in Table $1.$ The

growth rate falls from $8\%$ in $2017$ to $6\%$ in $2018$ and $2019,$ to $5\%$ in $2020$ and $2021,$ and

then to a sustainable rate of $3\%$ for $2022$ and beyond.

Under this scenario, Jeffery estimates the value of ABC plc stock to be closest to:

A$.69\mathrm{.}73$

B$.71\mathrm{.}03$

C$.72\mathrm{.}98$

Choose the correct answer and show all calculations