Mortgage Instruments Inc

Multiple Choice

Mortgage Instruments Inc. is expected to pay dividends of $1.03 next year. The company just paid a dividend of $1. This growth rate is expected to continue. How much should be paid for Mortgage Instruments stock just after the dividend if the appropriate discount rate is 5%.

A) $20.00
B) $21.50
C) $34.75
D) $50.00
E) $51.50