USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

Multiple Choice

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 percent per year for the next five years. After that dividends are expected to grow at a normal rate of 5 percent per year. Assume that the appropriate discount rate is 7 percent.
-Refer to Exhibit 8.3. The dividends for years 1, 2, and 3 are

A) $2, $2.08, and $2.16.
B) $2, $2.05, and $2.10.
C) $2.16, $2.24, and $2.32.
D) $2.16, $2.33, and $2.52.
E) $2.07, $2.14, and $2.21.