Firm needs to plow back its earnings to fuel growth

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Reference no: EM131077894

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 $10 per share dividend in 11 years and will increase the dividend by 6 percent per year thereafter. Required: If the required return on this stock is 13 percent, what is the current share price? (Do not round your intermediate calculations.)

$37.24 $42.08 $43.35 $39.98 $44.19

Reference no: EM131077894

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