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 $14.00 per share dividend in year 9 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?