Sugar Cookies will pay an annual dividend of $1.23 a share next year. The firm expects to increase this dividend by 8 percent per year the following four years and then decrease the dividend growth to 2 percent annually thereafter. Which one of the following is the correct computation of the dividend for Year 7?

A. ($1.23) (1.08)⁴(1.02)²

B. ($1.23) (1.08 4) (1.02 2)

C. ($1.23) (1.08 4) (1.02 3)

D. ($1.23) (1.08)⁴(1.02)⁴

E. ($1.23) (1.08)⁴(1.02)³