16. General Importers announced today that its next annual dividend will be

$2.60 per share. After that dividend is paid, the company expects to

encounter some financial difficulties and is going to suspend dividends for 5

years. Following the suspension period, the company expects to pay a

constant annual dividend of $1.30 per share. What is the current value of

this stock if the required return is 18 percent?

A. $3.01

B. $3.55

C. $3.89

D. $4.27

E. $4.88