11. Dividend Discount Model (LO1, CFA6) A share of stock will pay a dividend of $1.00 one...

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11. Dividend Discount Model (LO1, CFA6) A share of stock will pay a dividend of $1.00 one year from now, with dividend growth of 5 percent thereafter. In the context of a dividend discount model, the stock is correctly priced at $10 today. According to the constant dividend growth model, if the required return is 15 percent, what should the value of the stock be two years from now?

a. $11.03

b. $12.10

c. $13.23

d. $14.40

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