A stock is expected to pay its first $0.8 dividend in 4 years from now (t=4). The dividend is expected to be paid annually forever and grow by -2% pa (note the negative sign). The discount rate is 7% pa. Estimate what the stock price will be in 5.25 years from now. The stock price at time 5.25 is expected to be:

Select one:

a.

$12.6798

b.

$9.2903

c.

$8.8889

d.

$8.6825

e.

$8.5089