Helluva Stock Currently Pays a Dividend of $1

Multiple Choice

Helluva stock currently pays a dividend of $1.20 per share. Dividends are expected to increase at the rate of $0.10 per share for the next eight years. Determine the current value of Helluva common stock to an investor who expects to be able to sell the stock for $28 after 5 years. Assume that the investor requires a 12 percent rate of return on the security.

A) $66.00
B) $28.00
C) $21.20
D) $15.88