1. Nu-Tek, Inc. recently announced that they will pay their first annual dividend next year in the amount of $.50 a share. The dividend will be increased by 50 percent annually for the following two years, after which time the increase will be limited to 2.5 percent annually. How much are you willing to pay for one share of this stock if you require a 14 percent rate of return?

a. $8.01

b. $8.38

c. $8.55

d. $8.76