You plan on purchasing the stock of Red Cigars Inc. and you expect it to pay a dividend of $3.15 in 1 year, $3.55 in 2 years, and $4.05 in 3 years. You expect to sell the stock for $85.00 in 3 years. If your required return for purchasing the stock is 11 percent, how much would you pay for the stock today?

A.

$77.24

B.

$85.66

C.

$70.83

D.

$81.52