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 todayand will increase the dividend by 5.75 percent per year thereafter.

QRequired:

If the required return on this stock is 13.75 percent, what is the current share price? ??

Question #2

Anton, Inc., just paid a dividend of $2.90 per share on its stock. The dividends are expected to grow at a constant rate of 4.75 percent per year, indefinitely. Assume investors require a return of 9 percent on this stock.

Requirement 1:

What is the current price? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Current price

$ ??

Requirement 2:

What will the price be in six years and in thirteen years? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)

Six years	$ ??
Thirteen years	$ ??