Question 7.

Nachman Industries just paid a dividend of D0 = $3.75. Analysts expect the company's dividend to grow by 30% this year, by 10% in Year 2, and at a constant rate of 5% in Year 3 and thereafter. The required return on this low-risk stock is 9.00%. What is the best estimate of the stock's current market value?

a. $127.47

b. $151.68

c. $135.11

d. $144.04

e. $130.01

Please show excel formula and calculations!