The National Motor Company's last dividend was $1.25 and the directors expect to maintain the historic 4 percent annual rate of growth. How much should you be willing to pay for the stock if you feel that a 7 percent growth rate can be maintained indefinitely and you require a 16 percent return?

• A. $11.15
• B. $14.44
• C. $14.86
• D. $18.90
• E. $19.24