The Bell Weather Co

Multiple Choice

The Bell Weather Co. is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 20% a year for the next four years and then decreasing the growth rate to 5% per year. The company just paid its annual dividend in the amount of $1.00 per share. What is the current value of one share if the required rate of return is 9.25%?

A) $35.63
B) $38.19
C) $41.05
D) $43.19
E) $45.81