A Firm Recently Paid a $0

Multiple Choice

A firm recently paid a $0.30 annual dividend. The dividend is expected to increase by 8 percent in each of the next four years. In the fourth year, the stock price is expected to be $60. If the required rate for this stock is 10 percent, what is its value?

A) $15.00
B) $20.41
C) $42.13
D) $45.30