QUESTION 12

1. Sanaponic, Inc. will pay a dividend of $6 for each of the next 3 years, $8 for each of the years 4-7, and $10 for the years 8-10. Thereafter, starting in year 11, the company will pay a constant dividend of $7/year forever. If you require 16 percent rate of return on investments in this risk class, how much is this stock worth to you?

   	A.	$55.99
   	B.	$37.77
   	C.	$50.50
   	D.	$41.46
   	E.	$34.54
   	F.	$45.68