# Expected Stock Price

Need to know which answer is correct and all calculations. Please show work so I will understand the approach.

Please provide all steps on a TI BA Plus, if possible.

Kirkland Motors expects to pay a $2 per share dividend on its common stock at the end of the year (i.e. D1 = $2). The stock currently sells for $20 a share. The required rate of return on the company's stock is 12 percent (i.e. ks = .12). The dividend is expected to grow at some constant rate over time. What is the expected stock price five years from now?

© BrainMass Inc. brainmass.com June 3, 2020, 5:02 pm ad1c9bdddfhttps://brainmass.com/business/finance/expected-stock-price-years-11513

#### Solution Preview

Note: In this case the information about the dividends and the information that it ...

#### Solution Summary

The solution determines the expected stock price 5 years from now.

$2.19