Exhibit 11.6 Use the Information Below for the Following Problem(S)

Multiple Choice

Exhibit 11.6
Use the Information Below for the Following Problem(S)
Consider a firm that has just paid a dividend of $2. An analyst expects dividends to grow at a rate of 8% per year for the next five years. After that dividends are expected to grow at a normal rate of 5% per year. Assume that the appropriate discount rate is 7%.
-Refer to Exhibit 11.6.The future price of the stock in year 5 is

A) $113.40
B) $122.47
C) $132.27
D) $142.85
E) $154.35