Firm needs to plow back its earnings to fuel growth

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Reference no: EM131819691

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 $15 per share dividend 10 years from today and will increase the dividend by 5 percent per year thereafter. If the required return on this stock is 15 percent, what is the current share price?

Current share price $

Reference no: EM131819691

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