Metallica Bearings, Incorporated, is a young start-up company. No dividends will be paid on the stock over the next nine years because the firm needs to plow back its earnings to fuel growth. The company will pay a dividend of $14 per share 10 years from today and will increase the dividend by 3.9 percent per year thereafter. If the required return on this stock is 11.5 percent, what is the current share price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Answer is complete but not entirely correct. Current share price $ 166.17

Chemistry
10th Edition
ISBN:9781305957404
Author:Steven S. Zumdahl, Susan A. Zumdahl, Donald J. DeCoste
Publisher:Steven S. Zumdahl, Susan A. Zumdahl, Donald J. DeCoste
Chapter1: Chemical Foundations
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Metallica Bearings, Incorporated, is a young start-up company. No dividends will be paid
on the stock over the next nine years because the firm needs to plow back its earnings
to fuel growth. The company will pay a dividend of $14 per share 10 years from today
and will increase the dividend by 3.9 percent per year thereafter. If the required return
on this stock is 11.5 percent, what is the current share price? (Do not round intermediate
calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer is complete but not entirely correct.
Current share price $ 166.17
Transcribed Image Text:Metallica Bearings, Incorporated, is a young start-up company. No dividends will be paid on the stock over the next nine years because the firm needs to plow back its earnings to fuel growth. The company will pay a dividend of $14 per share 10 years from today and will increase the dividend by 3.9 percent per year thereafter. If the required return on this stock is 11.5 percent, what is the current share price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Answer is complete but not entirely correct. Current share price $ 166.17
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