Nonconstant growthmetallica bearings inc is a young, Ask an Expert

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Nonconstant Growth

Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next eight years, because the firm needs to plow back its earnings to fuel growth. The company will then pay a dividend of $16.50 per share 9 years from today and will increase the dividend by 5.75 percent per year thereafter.

Required:

If the required return on this stock is 13.75 percent, what is the current share price? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92079011

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