Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Transcribed Image Text:Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on
the stock over the next eight years, because the firm needs to plow back its
earnings to fuel growth. The company will then pay a dividend of $15.25 per share
9 years from today and will increase the dividend by 5.75 percent per year
thereafter.
Required:
If the required return on this stock is 13.75 percent, what is the current share price?
(Do not round intermediate calculations. Round your answer to 2 decimal places
(e.g., 32.16).)
Current share price
S
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