Boomer Products, Inc

Boomer Products, Inc. manufactures "no-inhale" cigarettes. As its target customers age and pass on, sales of the product are expected to decline. Thus, demographics suggest that earnings and
Dividends will decline at a rate of 4% annually forever. The firm just paid a dividend of $2.50; given
A required return is 12%, the price of the stock in two years will be:

A) $9.45
B) $11.52
C) $13.82
D) $14.98
E) $29.95