A Share You Are Interested in Paid a Dividend of €1

Multiple Choice

A share you are interested in paid a dividend of €1 last month.The anticipated growth rate in dividends and earnings is 25% for the next 2 years before settling down to a constant 5% growth rate.The discount rate is 12%.Calculate the expected price of the share.

A) €15.38
B) €20.50
C) €21.05
D) €22.27
E) €26.14