Gakuto, Inc just paid a dividend of $1.20 on its common stock at the end of last year. Dividends next year are expected to be $1.7% You believe you can set the there for $12.58. If you required rate of return in the stock is 11%. How much are you willing to pay for the stock today?

(1) $14.05 (2) $12.83 (3) $12. 50 (4) 11.64