Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next 14 years because the firm needs to plow back its earnings to fuel growth. The company will pay a $8 per share dividend in 15 years and will increase the dividend by 6 percent per year thereafter.

Required:

If the required return on this stock is 11 percent, what is the current share price? (Do not round your intermediate calculations.)

rev: 09_18_2012

$38.23

$37.12

$33.44

$38.98

$35.26