Twin City Knitting (TCK) Pays a Current Dividend of $2

Multiple Choice

Twin City Knitting (TCK) pays a current dividend of $2.20 and dividends are expected to grow at a rate of 7 percent annually in the foreseeable future.The beta of TCK is 1.2.If the risk-free rate is 9.2 percent and the market risk premium is 6 percent, at what price would you expect TCK's common stock to sell?

A) $14.35
B) $33.63
C) $23.40
D) $25.04