You are considering the purchase of a block of stock in Gallic Steel, a French steel producer. Gallic just paid a dividend of 1.5244 euros per share; that is, D0 = 1.5244 euros. You expect the dividend to grow indefinitely at a rate of 15% per year, but because of a higher expected rate of inflation in Europe than in the United States, you expect the euro to depreciate against the dollar at a rate of 5% per year. The exchange rate is currently 0.9830 euro per one U.S. dollar. For a stock with this degree of risk, including exchange rate risk, you feel that a 20% rate of return is required. Assuming that the constant growth model may be used, what is the most, in dollars, that you should be willing to pay for the stock?

$25.33

$16.21

$18.75

$20.91