New Gadgets is growing at a very fast pace. As a result, the company expects to pay annual dividends of $0.5, 0.80, and $1.20 per share over the next three years, respectively. After that, the dividend is projected stay constant forever at $1.20. What is the current value of this stock if the required return is 8 percent?

Question 5 options:

1)

$12.50

2)

$13.67

3)

$13.86

4)

$14.01