A company has announced that it will pay a $1.00 dividend in year 1, a $1.30 dividend in year 2, and a $1.70 dividend in year 3. After year 3, you estimate that the dividends will grow at 4% every year. How much would you be willing to pay for this company's stock at time 3 (without the time 3 dividend), given an 11% rate of return?

A company has announced that it will pay a $1.00 dividend in year 1, a $1.30 dividend in year 2, and a $1.70 dividend in year 3. After year 3, you estimate that the dividends will grow at 4% every year. How much would you be willing to pay for this company's stock at time 3 (without the time 3 dividend), given an 11% rate of return?

$28.25

$25.26

$26.96

$20.29