00:01
Alright, so here our first dividend is paid in two years.
00:04
So we want to calculate using our formula, d divided by r minus g.
00:09
In this case, we can plug in our values.
00:13
And then we're going to need to discount this value back.
00:16
So to do this, we're going to take 3 .20 divided by 0 .8 minus 0 .5.
00:24
And then we want to divide this by 1 .08 to the second power.
00:29
So we're going to get that our answer is $94 .28, which is option number two.
00:38
Then for question number two, to calculate our price in two years, we need to calculate our price for each year.
00:47
For our first year, our dividend is 230...
