Given a text T, and several options, according to the question posed in the text T to choose the most appropriate option from the options as the answer, please directly output the most appropriate option, do not need to output the explanation.

BJL Financial provides clients with professional investment management services that are tailored to the specific needs of each client. The firm's portfolio manager, Angelique Kwaza, has called a meeting with the senior analyst, Samira Khan, to discuss the quarterly rebalancing of three client portfolios. The valuation model used in the analyses is the discounted dividend model.● Client 1 has a portfolio with significant exposure to dividend-paying stocks.● Client 2 is interested in including preferred stock in the portfolio.● Client 3 has a growth-oriented equity-only portfolio.Khan has identified two utilities (ABC and XYZ) for possible inclusion in Client l's portfolio, as shown in Exhibit 1. She uses a discount rate of 7% for both common stocks.
| Exhibit 1 | Candidate Stocks for Client 1 |
| Stock | Company Description |
| ABC | MABC is a publicly traded utility with an expected constant growth |
| rate for earnings and dividends of 3.5%. |
| XYZ | ■The most recent year's dividend payout is 70%.The expected dividend |
| payout in future years is 60%. |
| m |
| The common stock price is$14.49per share. |
| m XYZ is a publicly traded utility with several unregulated business |
| subsidiaries. |
| m |
| The company generates 3%growth in dividends and has an annual |
| dividend payout of 80%.No changes in dividend growth or payout are |
| expected. |
| m The common stock price is$10per share. |
| M The current year earnings are$0.45per share， and next year's earn- |
| ings are expected to be$0.50per share. |


Kwaza asks Khan to investigate the most appropriate models for valuing utility companies. She tells Khan about the following points mentioned in various research reports on the utilities sector.● Report 1: A resurgence in domestic manufacturing activity will generate longterm growth in earnings and dividends that exceeds the cost of equity.● Report 2: Share repurchases are expected to increase. The report expresses confidence in the forecasts regarding the magnitude and timing of these repurchases.● Report 3: The report forecasts earnings growth of 4.5%. The key growth drivers are increases in population and business creation associated with stable GDP growth of 2.75%.For Client 2's portfolio, Khan has identified the non-callable perpetual preferred stocks of Standard Company and Main Company.● The Standard Company's preferred stock pays 2.75% on a par value of $100. Khan believes it to be fairly valued at a market price of $49.60.● The perpetual preferred stock of Main Company has a par value of $50 per share and pays an annual dividend of 5.5%. Khan estimates a capitalization rate at 6%. The current market price of Main Company preferred stock is $42.Finally, Khan has identified three stocks, shown in Exhibit 2, as likely candidates for Client 3's portfolio.
| Exhibit 2 | Candidate Stocks for Client 3 |
| Stock | Company Description |
| BIOK | MBI OK is a pro i table biotech frm that currently pay san annual divi- |
| d end of$1.20per share. |
| CCA X | .1 |
| The current annual dividend growth rate is 15%. |
| M Patent protection runs out in eight years， after which dividend |
| growth will likely decline at a steady rate over three years before |
| stabilizing at amature growth rate. |
| MCCA X builds communication software for state and federal prisons |
| and detention facilities. |
| The company is expected to hold its cash dividends steady at |
| $0.56per share for six years as it builds out facilities and acquiresproperties.■Dividends are expected to grow at the nominal GDP growth rate after |
| HLTV |
| the next six years. |
| M HLT Visa healthcare equipment and services firm that is expected |
| to maintain as table dividend payout ratio. |
| M Earnings are forecast to grow over the next two years by 27% |
| annually. |
| After that， earnings wll likely grow by 12%annually for another 10 |
| years before stabilizing at amature growth rate. |


 
Based on Exhibit 2, which stock can most appropriately be valued using a three-stage DDM with the second and third stages being treated as an H-model?
Option A:BIOK
Option B:CCAX
Option C:HLTY

Answer: A