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?

($1.23) (1.08 4) (1.02 3)($1.23) (1.08 4) (1.02 2)($1.23) (1.08)⁴(1.02)²($1.23) (1.08)⁴(1.02)³($1.23) (1.08)⁴(1.02)⁴