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Metallica Bearings, Inc. is a young start-up company. No dividends will be paid on the stock over the next 20 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 20 years because the firm needs to plow back its earnings to fuel growth. The company will then pay a dividend of $10 per share 21 years from today. The annual dividend will increase by 5% a year thereafter. In the annual required return on this stock is 10%, what is the current share price?
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