Suppose Starbucks Co. will pay a dividend of $0.4 per share one year from now (year 1), $0.8 per share two years from now (year 2), and $1.8 per share three years from now (year 3). After then (in other words, after the third year) dividends will grow at 3% per year forever. If the firms equity cost of capital is 10%, what is their current price per share?

$22.28

$26.49

$10.75

$2.38