What is price of square according to dividend discount model, Finance Basics

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What is price of square according to dividend discount model

Problem

Square (SQ) has just paid an annual dividend of $5. Analysts are predicting an 8% growth rate per year for the next 2 years. After two years, Square is expected to grow by 2% per year forever. Square's cost of equity is 11% per year. What is the price of Square according to the dividend discount model (multi-stage growth)?

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Finance Basics: What is price of square according to dividend discount model

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Finance Basics: What is price of square according to dividend discount model

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