A financial analyst expects Crane Service Inc to pay a dividend of $2 per share one year from

today, a dividend of $3 per share in years two, and estimates the value of the stock at the end of
year two to be $22.

If your required return on Crane Service stock is 14 %, what is the most you
would be willing to pay for the stock today if you plan to sell the stock in two years?
A) $20.99 B) $27.00 C) $26.75 D) $26.90

A