time line = $0 now; $0 in yr 1; $0 in yr 2; $1 in yr 3. P2 = D3/(k - g) = 1/(.17 - .07) = $10 Note the math. The price is always one year before the dividend date. Solve for the PV of $10 to be received in two years. FV = 10; n = 2; i = 17; compute PV = $7.30