Suppose That Sales and Profits of Oly Enterprises Are Growing

Suppose that sales and profits of Oly Enterprises are growing at a rate of 30% per year. At the end of four years the growth rate will drop to a steady 4%. At the end of year 5, Oly will issue its first
Dividend in the amount of $2 per share. If the required return is 16%, what is the value of a share of
Stock? Assume dividends grow at the same rate as earnings after year 4.

A) $7.49
B) $7.67
C) $8.17
D) $9.20
E) $9.91