You Are Planning to Purchase the Stock of Ted's Sheds

Multiple Choice

You are planning to purchase the stock of Ted's Sheds Inc. and you expect it to pay a dividend of $3 in 1 year, $4.25 in 2 years, and $6.00 in 3 years. You expect to sell the stock for $100 in 3 years. If your required return for purchasing the stock is 12 percent, how much would you pay for the stock today?

A) $75.45
B) $77.24
C) $81.52
D) $85.66