(Please use a math, finance equation and/ or formula. DONT USE A SHEET CHART, EXCEL, OR GRAPH)

11) ACME Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends. However, investors expect ACME to begin paying dividends, beginning with a dividend of 2.50 coming 3 years from today. The dividend will grow rapidly at a rate of 25% per year during Years 4 and 5, but after Year 5, growth be a constant 5% per year. If the required return on ACME is 12%, what is the value of the stock today? (Note: use the same information for the next three questions as well).

$40.05

$39.23

$38.49

$38.91

$39.78