Cellular Talk Is a New Firm in a Rapidly Growing

Multiple Choice

Cellular Talk is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 25% a year for the next three years and then decreasing the growth rate to 6% per year. The company just paid its annual dividend in the amount of $0.80 per share. What is the current value of one share of this stock if the required rate of return is 17%?

A) $11.17
B) $12.14
C) $12.94
D) $14.27
E) $15.06