“Use the following information to answer this and the next question.

Dividends of Super Drug, Inc. will grow at 25 percent a year for the next 3 years, 18 percent a year for years 4-6, and at a constant rate of 5 percent thereafter. The company just paid a dividend of $1.50 and you require a 15% rate of return from stocks with this risk level. ”

What is the dividend at the end of year 5?

a. 2.34

b. 2.93

c. 3.46

d. 4.08