Fiesta Meals is expected to pay an annual dividend of $1.60 a share next year. The company plans on increasing its dividend by 10 percent, 7 percent, and 5 percent a year for the next 3 years, respectively. After that, the growth rate will be held to 3 percent per year. What is one share of this stock worth to you today if you require a 15 percent rate of return?
a. $ 13.87
b. $ 14.79
c. $ 15.03
d. $ 15.28
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