Modular Systems Inc.just paid dividend D₀,and it is expecting both earnings and dividends to grow by 0 percent in Year 1 and 2,by 5 percent in Year 3,and at a rate of 10 percent in Year 4 and thereafter.The required return on Modular is 15 percent,and it sells at its equilibrium price,P₀ = $49.87.What is the expected value of the next dividend, ? (Hint: Draw a time line and then set up and solve an equation with one unknown, ) A) It cannot be estimated without more data. B) $1.35 C) $1.85 D) $2.35 E) $2.85

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The Answer of Modular Systems Inc.just paid dividend D₀,and it is expecting both earnings and dividends to grow by 0 percent in Year 1 and 2,by 5 percent in Year 3,and at a rate of 10 percent in Year 4 and thereafter.The required return on Modular is 15 percent,and it sells at its equilibrium price,P₀ = $49.87.What is the expected value of the next dividend, ? (Hint: Draw a time line and then set up and solve an equation with one unknown, ) A) It cannot be estimated without more data. B) $1.35 C) $1.85 D) $2.35 E) $2.85