Problem: : Club Auto Parts' last dividend was $0.50 and the company expects to experience no growth for the next two years. However, Club will grow at an annual rate of 5% in the third and fourth years and beginning with the fifth year, it should attain a 10 percent growth which it will sustain thereafter. Club has a required rate of return of 12 percent. What should be the current price per share and the price per share at the end of the second year?
a. $18.19; $25.07
b. $30.30; $25.06
c. $25.06; $30.30
d. $25.06; $18.19
e. None of the above