Parcel Corporation Expects to Pay a Dividend of $5 Per

Multiple Choice

Parcel Corporation expects to pay a dividend of $5 per share next year, and the dividend payout ratio is 50 percent. If dividends are expected to grow at a constant rate of 8 percent forever, and the required rate of return on the stock is 13 percent, calculate the present value of growth opportunities.

A) $100.00
B) $76.92
C) $23.08
D) $69.54