required return on equity and intrinsic value

[Tallal]

Hi
Lets suppose a stock is currently trading at its intrinsic value of $100 and the required return on equity is 10%. The reading on valuation concept implies that the target price at the end of the year will be 100*1.10 = $110 (assuming no dividends). My question is why would someone, after a year, pay $110 to buy the stock when its true value is only $100? I’m I missing something from the logic of required return or intrinsic value?

 

[S2000magician]

After a year its true value isn’t $100; its $110. Its true value is $100 today, not one year from today.

 

[MrSmart]

If it earns 10% during the year, then it’s value after a year will be V0 * 1.1, naturally. Since all of the earnings are ploughed back in the company ($10).