Beatrice Markets Is Expecting a Period of Intense Growth and Has

Multiple Choice

Beatrice Markets is expecting a period of intense growth and has decided to retain more of its earnings to help finance that growth.As a result,it is going to reduce its annual dividend by 30 percent a year for the next 2 years.After that,it will maintain a constant dividend of $2.50 a share.Last year,the company paid $3.60 as the annual dividend per share.What is the market value of this stock if the required rate of return is 14.5 percent?

A) $14.63
B) $16.70
C) $18.08
D) $19.61
E) $21.23