Question $2$

ABC Inc. is expected to pay a dividend in Year $1$ of $$1\mathrm{.}20,$ a dividend in Year $2$ of $$1\mathrm{.}50,$ and a dividend in

Year $3$ of $$2\mathrm{.}00.$ After Year $3,$ dividends are expected to grow at the rate of $10\%$ per year. An appropriate

required return for the stock is $14\%.$ Calculate the stock price of ABC Inc. in Year $1.$

$($a$)$ $$46\mathrm{.}38\%$

$($b$)$ $$40\mathrm{.}68$

$($c$)$ $$44\mathrm{.}75$

$($d$)$ $$45\mathrm{.}18$