Problem:
ZORG Industries, Inc., is a young start-up company. It will pay no dividends on the stock over the next nine years because the it needs to plow back its earnings to fuel growth. The ZORG will pay a $15 per share dividend in 10 years and will increase the dividend by 5 percent per year thereafter.
Required:
Question: If the required return on this stock is 15 percent, what is the current share price?
Note: Show supporting computations in good form.