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.

Select one:

a. $21.50b. $15.03c. $15.78d. $22.57