Estimate expected stock price

Reference no: EM1364413

Kirkland Motors expects to pay a $2.00 a share dividend on its common stock at the end of the year (i.e., D1 = $2.00). The stock currently sells for $20.00 a share.

The required rate of return on the company's stock is 12 percent (i.e., rs = 0.12). The dividend is expected to grow at some constant rate over time. What is the expected stock price five years from now?

Reference no: EM1364413

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