R&D Technology Corporation Just Paid a Dividend of $0

Multiple Choice

R&D Technology Corporation just paid a dividend of $0.50 per share. Analysts expect its dividend to grow at 24 percent per year for the next two years and then 8 percent per year thereafter. If the required rate of return in the stock is 16 percent, calculate the current value of the stock.

A) $1.11
B) $7.71
C) $8.82
D) $10.38