Question: Jane Chan invests in a stock that will pay dividends of $2.00 at the end of the first year; $2.20 at the end of the

  1. Jane Chan invests in a stock that will pay dividends of $2.00 at the end of the first year; $2.20 at the end of the second year; and $2.40 at the end of the third year. Also at the end of the third year she believes she will be able to sell the stock for $35. What is the most she should be willing to pay for this investment today if a discount rate of 10 percent is applied?

A 31.74

B 39.60

C 27.08

D none of these

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