Intrinsic Value Calculation Using DDM

Investing in equities often requires a thorough understanding of various valuation techniques. One popular method is the Dividend Discount Model (DDM), which estimates the value of a stock based on the present value of its expected future dividends. When utilizing the DDM, it is essential to consider how dividends are expected to grow over time.

A company is expected to pay a dividend of $2 per share next year, and dividends are expected to grow at a constant rate of 5% indefinitely. If the required rate of return on the stock is 10%, what is the intrinsic value of the stock using the Gordon Growth Model (a form of DDM)?