use Gordon growth model: P0 Price (at t=0) = D1 / (r - g)
P0 = 957 / (0.183 - 0.039)
= 957 / 0.144
= $6,645.83
If I invest in xyz, they will pay a cash flow of $957 next year and the cash flows you receive will grow by 3.9% each year forever. If the appropriate discount rate is 18.3%, how much should I be willing to pay to invest?
I'm not really looking for the answer, but HOW to get there. I use Excel functions a lot but I am unsure of what one to use.
