A firm is planning on paying its first dividend of $2 three years from today. After that, dividends are expected to grow at 6% per year indefinitely. The stock's required return is 14%. What is the intrinsic value of a share today?

A) $25
B) $16.87
C) $19.24
D) $20.99

Intrinsic Value

The estimated true value of an asset, based on underlying perceptions of its true financial performance and future prospects.

Required Return

The lowest yearly percent return on an investment necessary to attract individual or corporate investors to a specific security or project.