Basil is thinking about buying some preference shares in Louth Wooltops Limited. Basil thinks that a suitable value for the required rate of return for these shares is 7.45% per annum. The company will pay an annual dividend at the end of each year, commencing at the end of Year 2, as it will be two years before the business will be profitable. The dividend will be $1.80 per share, and is forecast to be paid forever. Based on this information, one preference share in Louth Wooltops Limited is worth approximately

Select one:

a. $22.55

b. $22.49

c. $21.07

d. $23.78