McNally Motors has yet to pay a dividend on its common stock. However, the company expects to pay a $1.00 dividend starting two years from now (i.e., D₂ = $1.00). Thereafter, the stocks dividend is expected to grow at a constant rate of 5 percent a year. The stocks beta is 1.4, the risk-free rate is r_RF = 0.06, and the expected market return is r_M = 0.12. What is the stocks expected price four years from now, i.e., what is ?

a. $10.63

b. $12.32

c. $11.87

d. $13.58

e. $11.21