Predict the value of stock price per share

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A stock analyst is looking to use a model that will predict the value of XYZ’s stock price per share. XYZ currently pays a dividend of $1 per share. The analyst predicts that XYZ will grow the dividend by 2% for two consecutive years, and then, beginning in year 3, will grow the dividend by 1% per year each and every year thereafter forever. The required rate of return of XYZ is 8%. Using these analyst projections, which of the following comes closest to the predicted price per share of XYZ? A. $14.70 B. $9.58 C. $25.72 D. $20.58 E. $17.15

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