1. Modular Systems Inc. is expecting both earnings and dividends to grow by 15% in Year 1, 0% in Year 2, by 5%in Year 3, and at a constant rate of 10 percent in Year 4 and thereafter. The required return on Modular is 15 percent, and it sells at its equilibrium price, P₀ = $49.89. What is the approximate value of its expected dividend next year?

A) $0

B) $1.25

C) $2.15

D) $2.45

E) $2.85