Business, 21.03.2020 07:47, snlawson9053

Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next 7 years because the firm needs to plow back its earnings to fuel growth. The company will then pay a dividend of $16.75 per share 8 years from today and will increase the dividend by 6 percent per year thereafter. The required return on the stock is 14 percent.

What is the price of the stock 7 years from today? (Do not round intermediate calculations. Round your answer to 2 decimal places

Price in 7 years $

What is the current share price? (Do not round intermediate calculations. Round your answer to 2 decimal places

Current share price $

Answers: 2

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Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over t...