Global Tek Plans on Increasing Its Annual Dividend by 15

Multiple Choice

Global Tek plans on increasing its annual dividend by 15 percent a year for the next four years and then decreasing the growth rate to 2.5 percent per year. The company just paid its annual dividend in the amount of $.20 per share. What is the current value of one share of this stock if the required rate of return is 17.4 percent?

A) $1.82
B) $2.18
C) $2.03
D) $2.71
E) $3.05