A stock is not expected to pay a dividend over the next five years. Six years from now , the company anticipates that it will establish a dividend for $5 per share. Once the dividend is established, the market expects the dividends to grow by 5% every year forever. The risk free rate is 5%, beta is 1.2, and the market risk premium is 5%. The required return is expected to remain constant. What is the price today based on capital asset pricing model? Hint ( look at similar problems worked out in the slides)
A) 94.45
B)49.45
C) 51.93
D)54.52
E)59.94