Problem:
Tim Taylor Tools 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 $9 per share dividend in year 8 and will increase the dividend by 4 percent per year thereafter.
Required:
Question: If the required return on this stock is 12 percent, what is the current share price?
Note: Please show guided help with steps and answer.