another equity question

smgardy

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A share of a stock is expected to pay a dividend of 1$ one year from now, with growth at 5%thereafter. In the context of the dividend discount model, the stock is currently priced at 10%. Acording to the single stage, constant growth dividend discount model, if the required return is 15%, the value of a stock two years from now should be.........11.03$............can anyone explain. Thanks.
 
D0=0
D1=1
D2=1.05
D3=1.1025 (1.05 x 1.05)

Solve at P2

Value at P2 = D3/(k-g)

1.1025/.1=11.025
 
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