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 then pay a dividend of $13.50 per share 11 years from
today and will increase the dividend by 5.25 percent per year thereafter.
If the required return on this stock is 13.25 percent, what is the current share price? (Do
not round intermediate calculations and round your answer to 2 decimal places, e. g.,
32.16.)
Answers: 1
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Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the
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