Current share price-no dividends will be paid on the stock

Assignment Help Financial Management

Reference no: EM131936600

Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next nine years, because the firm needs to plow back its earnings to fuel growth. The company will pay a dividend of $15 per share in 10 years and will increase the dividend by 5 percent per year thereafter. If the required return on this stock is 14.5 percent, what is the current share price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Current share price $

Reference no: EM131936600

Questions Cloud

What effect would the finding have on your responses : On further analysis, you find that the growth rate in FCF beyond 2019 will be 4% rather than 3%. What effect would this finding have on your responses.

Re-design the companys hq network : Your task is to re-design the company's HQ network and secure the Company's network infrastructure and communications.

What will the fund balance grow to in 35 years : If you invest $500 at the beginning of each year in a mutual fund earning an average 9% after-tax rate of return.

How to run the business : They decide together what to serve, what hours to operate, and generally how to run the business. Do they have a partnership?

Current share price-no dividends will be paid on the stock : Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next nine years, what is the current share price?

Who pays the tax the partnership or able : Who must file a tax return listing this as income, the partnership or Able? Who pays the tax, the partnership or Able?

How a firm is managing its current assets : Inventory turnover is an important measure of how a firm is managing its current assets, but differs among firms.

What is the value of your retirement plan : Assume that you contribute $180 per month to a retirement plan for 15 years. Then you are able to increase the contribution to $380 per month.

Stock and investing in the bond of a corporation : What is the difference between investing in the stock and investing in the bond of a corporation? Which one is the less risky investment and why?

User Account

All Pages