Question: Please show full work if possible, would like to be able to understand the problem and solution. 4. The dividend that was just paid for

Please show full work if possible, would like to be able to understand the problem and solution.

4. The dividend that was just paid for ABC stock was $3.25. The company is expected to grow at

6% in the next 4 years and then have a constant growth of 3% after that forever. The cost of

capital (equity) is 5%. What should be the stock price of this company now?

A. $153.12 B. $172.67 C. $187.33 D. $198.77 E. $213.15

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