You are thinking to buy Komatsu's stock at the price of 2,000 yen now. Next year's dividend is expected to be 110 yen.

Assume as follows:

Dividend of 110 yen continues forever.

Your required rate of return is 5%

By using the formula of Dividend Discount Model

Assume as follows:

Next year's dividend is 110 yen. It is expected to increase 1% forever, every year.

Your required rate of return is 6%

By using the formula of Dividend Discount Model