No dividends will be paid on stock over next 10 years


Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next 10 years because the firm needs to plow back its earnings to fuel growth. The company will pay a $12 per share dividend in 11 years and will increase the dividend by 5 percent per year thereafter. Required: If the required return on this stock is 10 percent, what is the current share price? (Do not round your intermediate calculations.)

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Financial Management: No dividends will be paid on stock over next 10 years
Reference No:- TGS02288691

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