Garcia Inc

Multiple Choice

Garcia Inc. has a current dividend of $3.00 per share (D0 = $3.00) . Analysts expect that the dividend will grow at a rate of 25 percent a year for the next three years, and thereafter it will grow at a constant rate of 10 percent a year. The company's cost of equity capital is estimated to be 15 percent. What is the current stock price of Garcia Inc.?

A) $ 75.00
B) $ 88.55
C) $ 95.42
D) $103.25
E) $110.00