Question:
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?