Over the Next Three Years, Distant Groves Will Pay Annual

Multiple Choice

Over the next three years, Distant Groves will pay annual dividends of $.65, $.70, and $.75 a share, respectively. After that, dividends are projected to increase by 2 percent per year. What is one share of this stock worth today at a required return of 14.5 percent?

A) $5.49
B) $5.94
C) $5.68
D) $5.55
E) $5.86