CFA CFA Level 1 Multi-Period DDM with financial calculator

Multi-Period DDM with financial calculator

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    • Avatar of mdlynch3mdlynch3
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        • CFA Level 1
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        A stock that currently does not pay a dividend is expected to pay its first dividend of $1.00 five years from today. Thereafter, the dividend is expected to grow at an annual rate of 25% for the next three years and then grow at a constant rate of 5% per year thereafter. The required rate of return is 10.3%. The value of the stock today is closest to:

        A) $20.65.
        B) $22.72.
        C) $23.87.

        Could someone demonstrate how this can be solved with a financial calculator?

        Thanks!

      • Avatar of PahtsanPahtsan
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          • CFA Level 1
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          I’m pretty sure that there isn’t a way, you just have to grind it out piece by piece. Correct me if I’m wrong, it would save a lot of time.

        • Avatar of mdlynch3mdlynch3
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            • CFA Level 1
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            Answer is A

          • Avatar of riteshbadairiteshbadai
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              whats the answer

            • Avatar of riteshbadairiteshbadai
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                what is the answer

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