Question
Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next seven years, because the firm needs
Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next seven years, because the firm needs to plow back its earnings to fuel growth. The company will then pay a $12.10 per share dividend in year 8 and will increase the dividend by 5.50 percent per year thereafter. Required: If the required return on this stock is 12.50 percent, what is the current share price? (Select rounded answers as directed, but do not use the rounded numbers in intermediate calculations.) $67.37 $75.79 $83.37 $68.21 $172.86
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