Question: A stock is expected to pay its first $2.9 dividend in 3 years from now ( t=3). The dividend is expected to be paid annually

A stock is expected to pay its first $2.9 dividend in 3 years from now ( t=3). The dividend is expected to be paid annually forever and grow by -2% pa (note the negative sign). The discount rate is 6% pa. Estimate what the stock price will be in 4.25 years from now. The stock price at time 4.25 is expected to be:

Select one:

a. $35.3254

b. $36.0463

c. $37.4449

d. $38.9888

e. $46.4363

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