Suppose the current price of gold is $2,580 an ounce. Hotshot Consultants advises you that gold prices will increase at an average rate of 10% for the next two years. After that the growth rate will fall to a long-run trend of 1% per year. Assume that gold prices have a beta of 0 and that the risk-free rate is 5%.

What is the present value of 1.9 million ounces of gold produced in 6 years?

5.93 billion

4.9 billion

5.15 billion

5.4 billion