Savickas Petroleum's Stock Has a Required Return of 12%,and the Stock

Multiple Choice

Savickas Petroleum's stock has a required return of 12%,and the stock sells for $40 per share.The firm just paid a dividend of $1.00,and the dividend is expected to grow by 30% per year for the next 4 years,so D₄ = $1.00(1.30) ⁴ = $2.8561.After t = 4,the dividend is expected to grow at a constant rate of X% per year forever.What is the stock's expected constant growth rate after t = 4,i.e.,what is X?

A) 5.17%
B) 5.44%
C) 5.72%
D) 6.02%
E) 6.34%