A company has a 8.50% required rate of return and will not pay any dividends for the next seven years. At the beginning of year 8, it will pay a dividend of $1.25 per share. The dividend (always paid at the beginning of a year) is expected to grow at 6.25% annually from that point onwards. Calculate the stock price today.

Question 14 options:

$34.05

$34.90

$35.76

$36.61

$37.46