The ABC Co. has paid annual dividends of $0.30, $0.64, $1.20, and $1.45 over the past four years. Dividends in the future are expected to grow at a constant rate of 3.5%. Which one of the following formulas should be used to compute the value of the stock today?

a.

P₀ = D₁/(r - g)

b.

P₀ = D/r

c.

P₀ = D₁/(1 + r)ⁿ+ g

d.

P₀ = D₁/(1 + r)¹+ D₂/(1 + r)²... + D_n/(1 + r)ⁿ+ P_n/(1 + r)ⁿ

e.

P₀ = D₁/(r - g)ⁿ