A share of stock will pay a dividend of $1.00 one year from now, with dividend growth
Question:
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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Related Book For 
Fundamentals Of Investments Valuation And Management
ISBN: 9781266824012
10th Edition
Authors: Bradford Jordan, Thomas Miller, Steve Dolvin
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