Question:
Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next 15 years, because the firm needs to plow back its earnings to fuel growth. The company will pay a $6 per share dividend in 16 years and will increase the dividend by 6 percent per year thereafter. If the required return on this stock is 11 percent, the current share price is $.