Question $28$

$2\mathrm{.}5pts$

A firm recently paid a $$14\mathrm{.}50$ annual dividend. The dividend is expected to increase by $ $0\mathrm{.}50$ in each of the next two years. In the second year $($at $t=2),$ the stock price is expected to be $$120.$ The required rate of return for this stock is $15\mathrm{.}0$ percent Calculate the stock price.

$$ $$115\mathrm{.}50$

$$112\mathrm{.}52$

$$113\mathrm{.}99$

$$114\mathrm{.}05$