Betty Corp. just paid a dividend of $3 per share and you think dividends will grow at 2% a year indefinitely. If the appropriate discount rate is 10%, how much should the price of a share be?

D0=3, r=10%, g=2%, Price per share= D0*(1+g)/(r-g) =3*(1+2%)/ (10%-2%)=38.25

What do you expect the price of Betty Corp. to be in one year?