A company is expected to pay a dividend in year 1 of $3.75, a dividend in year 2 of $2.25, and a dividend in year 3 of $1,00. After year 3, dividends are expected to decline at the rate of 2% per year. An appropriate required return for the stock is 8%. Using the multi-stage DDM, the stock should be worth_________

A. $18.25

B. $13,97

C. $8.78

D. $12.06