Sew 'N More Just Paid an Annual Dividend of $1

Multiple Choice

Sew 'N More just paid an annual dividend of $1.42 a share. The firm plans to pay annual dividends of $1.45, $1.50, and $1.53 over the next 3 years, respectively. After that time, the dividends will be held constant at $1.60 per share. What is this stock worth today at a discount rate of 11.7 percent?

A) $12.39
B) $13.30
C) $13.67
D) $12.79
E) $13.41