Suppose a company pays $0.5 dividends that has risen at an annual compound growth rate of 4% and the stock has a beta of 0.7. If the US treasury bills of 6-month duration offered a risk-free return of 2% and you anticipate that the market will rise annually at a compound rate of 7.5% and a dividend growth continues indefinitely, what would be the maximum price you should pay for the stock?

$5.85

$7.25

$28.11

$17.25