Gates Industries Current Common Stock Dividend (Year 0) Is $2

Multiple Choice

Gates Industries current common stock dividend (year 0) is $2.50 per share and is expected to continue growing at a rate of 5% per year for the foreseeable future.Currently the risk-free rate is 7.5% and the estimated market risk premium (i.e., km - rf) is 8.3%.Value Line has estimated Gates Industries beta to be 1.10.Determine the expected price for Gates Industries common stock.

A) $21.50
B) $15.03
C) $15.78
D) $22.57