Charlie Is Valuing a Common Stock with Forecast Dividends as Shown

Charlie is valuing a common stock with forecast dividends as shown below.He thinks that 10% is an appropriate discount rate.What is the most he should pay for the stock?
$\begin{array}{|r|r|c|c|c|}\hline \mathrm{D}_{1} & \mathrm{D}_{2} & \mathrm{D}_{3} & \mathrm{D}_{4} & \text { Later } \\\hline \$ 2.00 & \$ 2.40 & \$ 2.76 & \$ 3.17 & 6 \% \text { growth } \\\hline\end{array}$

A) $60.20
B) $63.25
C) $65.42
D) $84.01

Correct Answer:

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