On the first of January (t=0) the return on the risk free asset is 2% and the market risk premium is 10%. Determine the no-arbitrage price of a firm with beta 0.5 knowing that the analysts following the firm are expecting no dividend payments for the next two years (t=1, and t=2) and a small dividend of 2 per share for the third year (t=3) that is expected to increase by 3% per year for the foreseeable future.

a. Between 49 and 51 euros.

b. Between 42 and 45 euros.

c. Not enough data.

d. None of the above.