Since Its Inception Five Years Ago,Companioni Gyms Has Not Paid

Multiple Choice

Since its inception five years ago,Companioni Gyms has not paid a dividend to its common stockholders,and it does not expect to pay a dividend for the next five years.Beginning six years from today,however,Companioni Gyms expects to pay a $2 dividend,which,from that point on,will increase by 10 percent per year forever.Stocks with similar risks have a required rate of return equal to 15 percent.What should be the market price of Companioni's common stock?

A) $19.89
B) $22.87
C) $17.29
D) $44.00
E) There is not enough information to answer this question.