I am stock solving this problem, can someone help me with the answers please....

Question

I am stock solving this problem, can someone help me with the answers please....

Imagine that a company just paid a dividend of $4 and that the dividend is expected to grow indefinitely at a rate of 6% per year. The required return is 11%.

1) What is the intrinsic value of one share of this business today?

A$88.75

B$84.80

C$80.00

D$36.36

2) What should be the value of one share of this business one year from today?

A$89.89

B$84.80

C$94.08

D$89.04

3) At what rate did the share price grow over the year?

A5%

B11%

C6%

D0%

Explanation / Answer

Answer1 = the intrinsic value is arrived at by dividing Dividend with the difference between Growth rate and required rate of return

Ie., 4/ 11%-6% = 80 answer is C

Answer2 The growth rate at which dividend is growing is 6% and second year the dividend will be 4+ 6% = 4.24

The value will be   4.24/11%- 6% = 84.80 answer is B

Answer 3 - The denominator is constantly going up by 5% (11% - 6%). So the answer is 5% which is A

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