Question: Wondering if I am doing this wrong or if the answer in the answer key is wrong? DEF's common stock just paid a dividend of

Wondering if I am doing this wrong or if the answer in the answer key is wrong?

DEF's common stock just paid a dividend of $3 per share. You expect the dividend to increase by 5% per year in perpetuity. If you require a 15% rate of return what is the price of the stock today?

A) $21.00

B) $31.50

C) $30.00

D) $20.00

E) none of the above

I solved it using growing perpetuity formula of Div1/re - g . I did 3/0.15-0.5 and i got the answer as 30 which is C. But my answer key says the answer is B.

Did I solve this wrong?

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