Long Life Insurance Inc. just paid a dividend of $1.50, and projects supernormal growth at of 12% for the next three years. After that growth is expected to slow down to a normal 4% and go on at that rate for the foreseeable future. Similar stocks are earning a return of 10%. How much would you pay for a share of Long Live today?

Select one:

a.

$37.70

b.

$26.00

c.

$32.08

d.

$28.28