Question: ABC Inc. does not currently pay a dividend. Analysts expect ABC to commence paying annual dividends in three years. The first dividend is expected to

ABC Inc. does not currently pay a dividend. Analysts expect ABC to commence paying annual dividends in three years. The first dividend is expected to be $2 per share. Dividends are expected to grow from that point at an annual rate of 4% in perpetuity. Investors expect a 12% return from the stock. What should the price of the stock be today?

Group of answer choices

$21.37

$22.32

$22.03

$19.93

$25.00

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