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# Multi-Period DDM with financial calculator

BostonPosts: 3 Associate
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!

## Comments

• MumbaiPosts: 3 Associate
whats the answer
• MumbaiPosts: 3 Associate
what is the answer
• BostonPosts: 3 Associate
Answer is A
• Los AngelesPosts: 12 Associate
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.
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