A Fast Growing Firm Recently Paid a Dividend of $0

Multiple Choice

A fast growing firm recently paid a dividend of $0.80 per share. The dividend is expected to increase at a rate of 30% rate for the next 4 years. Afterwards, a more stable 7% growth rate can be assumed. If a 10% discount rate is appropriate for this stock, what is its value?

A) $60.48
B) $60.18
C) $61.34
D) $73.86