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Allston Inc. just paid an annual dividend of $1.00. The expected dividend next year $1.50, and the year after that, $2.00. After the third year,
Allston Inc. just paid an annual dividend of $1.00. The expected dividend next year $1.50, and the year after that, $2.00. After the third year, dividends will grow at a constant rate of 5% per year. If your required rate of return for Allston is 10%, what is the most you should pay for this stock.
A. $45.50
B. $31.05
C. $37.73
D. $36.73
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