Problem:
Macrohard Company expects to pay a dividend of $6 per share at the end of year one, $8 per share at the end of year two and then be sold for $136 per share.
Required:
Question: If the required rate on the stock is 20%, what is the current value of the stock?
A) $100
B) $105
C) $110
D) $120
Note: Provide support for rationale.