What is the current share price? Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next seven years, because the firm needs to plow back its earnings to fuel growth. The company will then pay a dividend of $13.00 per share 8 years from today and will increase the dividend by 6 percent per year thereafter. The required return on the stock is 14 percent.
What is the price of the stock 7 years from today?