Donald Duck Inc. plans to not pay any dividends over the next two years and instead reinvest all of its earnings. Beginning in year three, the firm will pay a $3.57 per share dividend, which will increase 1.5% annually thereafter. If the required return is 15 percent, what should the stock sell for today?
A. $16.61
B. $18.86
C. $19.80
D. $20.00
E. $26.61
