Calculate the value of a stock with an expected annual dividend of $2.00 next year and

estimated annual dividend growth of 2% per year indefinitely. Assume a discount rate

of 8%. Solve the problem two different ways: first by using the algebraic formula for

the Gordon Growth Model, then by using Excel to calculate and sum the dividends

and their respective present values for the next 150 years.

Answer rating: 100% (QA)

First we can calculate the value of the stock using the Gordon Growth Model Gordon Growth Model Form... View the full answer