### Calculating expected stock price

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##### Reference no: EM1367008

Kirkland Motors expects to pay a \$2 / share dividend on common stock at the end of the year. The stock currently sells for \$20 per share. The required rate of return on corporation's stock is 12% [ks = .12]. The dividend is expected to grow at some constant rate over time. What is the expected stock price five years from now?
a. \$21.65
b. \$22.08
c. \$25.64
d. \$35.25
e. \$36.78

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