Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next 10 years because the firm needs to plow back its earnings to fuel growth. The company will pay a dividend of $6 per share 11 years from today and will increase the dividend by 8 percent per year thereafter.

If the required return on this stock is 13 percent, what is the current share price?

Multiple Choice

• $35.35

• $36.41

• $33.58

• $37.12

• $31.28