show computation of the following?

Question

the last dividend on Spirex Corporation's common stock was $4, and the expected growth rate is 10%. If you require a rate of return of 20%, what is the highest price you should be willing to pay for this stock?

Answer 1

Isn't this P = div0(1+g)/(r-g)

P = 4(1+10%)/(20% - 10%) = 4.4/10% = 44.