McGaha Enterprises expects earnings and dividends to grow at a rate of 25% for the next 4 years, after the growth rate in earnings and dividends will fall to zero, i.e., g = 0. The company's last dividend, D0, was $1.25, its beta is 1.20, the market risk premium is 5.50%, and the risk-free rate is 4.00%. What is the current price of the common stock?
a. $27.89
b. $29.05
c. $31.42
d. $30.21
e. $26.09