Bill Bailey and Sons pays no dividend at the present time. The company plans to start paying an annual dividend in the amount of $.30 a share for two years commencing two years from today. After that time, the company plans on paying a constant $1 a share dividend indefinitely. Given a required return of 14%, what is the value of this stock?
a. $4.82
b. $5.25
c. $5.39
d. $5.46
e. $5.58