Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next 8 years because the firm needs to plow back its earnings to fuel growth. The company will pay a dividend of $9 per share 9 years from today and will increase the dividend by 4 percent per year thereafter.

If the required return on this stock is 8 percent, what is the current share price?

MC

• $127.64
• $112.56
• $121.56
• $125.21
• $115.48