Consider the stock of Self Company, which will pay an annual dividend
of $2 one year from today.  The dividend will grow at a constant
annual rate of 5 percent, forever.  The market requires a 12-percent
return on the company?s stock.
a. What is the current price of a share of the stock?
b. What will the stock price be 10 years from today?

r = DIV1/Po + g (p. 53).

We know from the problem the value of the following: r= 0.12.  DIV1 =
$2.  g = 0.05.  Solving for Po results in $28.57.  This is the current
share price of the stock.

Po = (DIV10 + P10)/(1+r)^10 (p. 50).  DIV10 = DIV1*1.05^9 = $3.10. 
Solving for P10 results in $85.63.  This will be the share price in 10
years.

Source:  "Principles of Corporate Finance" Fourth Edition by Brealey &
Myers, McGraw-Hill Inc. (1991)

Sincerely,

Wonko