Otobai Motor Company Is Currently Paying a Dividend of $1

Multiple Choice

Otobai Motor Company is currently paying a dividend of $1.40 per year. The dividends are expected to grow at a rate of 18% for the next three years and then a constant rate of 5% thereafter. What is the expected dividend per share in year 5?

A) $2.35
B) $2.54
C) $2.91
D) $1.50