Find value of stock if the dividend is increases to value


The dividend-growth model may be used to value a stock:

V= D0(1+g)

k-g

a. What is the value of a stock if:

D0 = $2
k = 10%
g = 6%

b. What is the value of this stock if the dividend is increased to $3 and other variables remain constant?

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Finance Basics: Find value of stock if the dividend is increases to value
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