Problem
I have calculated the return requirement, the formula k = rf + risk premium is used, where rf is the risk-free interest rate and the risk premium is 6%. In this case, rf is equal to the current 10-year Treasury yield, which has gradually declined by 0.25% per year for 24 years. Thus, rf for year t is equal to 6% - 0.25% * t. To calculate the value of the stock for each year from year 0 to year 24, the formula for DDM is used: P = D/(k-g), where P is the price of the stock, D is the dividend, k is the required rate of return, and g is the dividend growth rate. We can calculate D for each year using the 2% growth rate: D(t) = D(1) * (1+g)^t = 10 * (1+0.02)^t Thus, the price of the stock for year t is: P(t) = 10*(1+0.02)^t / (k-g).
How can I plot the share's value in a graph that shows how the value decreases as the interest rate falls over time, can I get help with how I plot the graph?