Estimating Intrinsic Value with DDM

In the context of equity valuation, the Dividend Discount Model (DDM) is a method used to determine the value of a company's stock. The DDM calculates the present value of future dividend payments to estimate what a stock should be worth today. An important factor in DDM is the expected growth rate of dividends.

Consider a company that just paid a dividend of $2.00 per share, and it is expected that dividends will grow at a constant rate of 5% per year indefinitely. If the required rate of return on the stock is 10%, what is the estimated intrinsic value of the stock using the Gordon growth model, a form of the DDM?