Agarwal Technologies was founded 10 years ago. It has been profitable for the last 5 years, but it has needed all of its earnings to support growth and thus has never paid a dividend. Management has...

Agarwal Technologies was founded 10 years ago. It has been profitable for the last 5 years, but it has needed all of its earnings to support growth and thus has never paid a dividend. Management has indicated that it plans to pay a $0.25 dividend 3 years from today, then to increase it at a relatively rapid rate for 2 years, and then to increase it at a constant rate of 8.00% thereafter. Management's forecast of the future dividend stream, along with the forecasted growth rates, is shown below. Assuming a required return of 11.00%, what is your estimate of the stock's current value?

0	1	2	3	4	5	6
Growth rate	NA	NA	NA	NA	50%	25%	8%
Dividends	$0.000	$0.000	$0.000	$0.250	$0.375	$0.469	$0.506

1. $9.94


2. $10.19


3. $10.45


4. $10.72


5. $10.99