Can you briefly show me the easiest way to calculate and understand without a calculator and also how to solve with a calculator please. Thanks.

A share of common stockI three reasons. First, with common stock, because comm e of return that ster lt! age onine im advance. Second, the life of the investment is essentiall in which we can no maturity. Third, there is no way to easily observe t can come u stock has et requires, Nonetheless, as we will see, there are value of the future cash flows for a share of stoc with the present its value. You Imagine that you are considering buying a share of stock today. You plan to in one year. You somehow know that the stock will be worth $70 at he that the stock will also pay a $10 per share dividend at the end of the a 25 percent return on your investment, what is the most you would pay for other words, what is the present value of the $10 dividend along with the $7 at 25 percent? stock presen What writte out fo p CASH FLOWS seli , year. If you requi for the stock? If you buy the stock today and sell it at the end of the year, you will have cash. At 25 percent: a total of $80m of al Present value (S10 + 70)/1.25 $64 Therefore, S64 is the value you would assign to the stock today. one period. If D, is the cash dividend paid at the end of the period, then: More generalily, let P, be the current price of the stock, and assign P, to be the price i this [8.1 where R is the required return in the market on this investment. This is even harder to do, so we've only made the problem more complicated. the stock price in one period would be: Notice that we really haven't said much so far. If we wanted to determine the value of share of stock today (P). we would first have to come up with the value in one year (P Yor What is the price in one period, P,? We don't know in general. Instead, suppose we somehow knew the price in two periods, P. Given a predicted dividend in two periods, D an th ru al Pi= (D, + P,)/(1 + R) If we were to substitute this expression for P, into our expression for Po we would have: D, + P + R P. Now we need to get a price in two periods. We don't know this either, so we can tinate again and write