Firm needs to plow back its earnings to fuel growth

Assignment Help Financial Management

Reference no: EM132016565

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 then pay a dividend of $13.25 per share 10 years from today and will increase the dividend by 5 percent per year thereafter. If the required return on this stock is 13 percent, what is the current share price?

Reference no: EM132016565

Questions Cloud

How security can be instilled within the sdlc : Provide three examples that demonstrate how security can be instilled within the Systems Development Life Cycle (SDLC). Provide two examples on what users may.

Dividends are expected to grow at rate : Dividends are expected to grow at a rate of 32 percent for the next three years, with the growth rate falling off to a constant 7.2 percent thereafter

What change in the dna sequence : What change in the DNA sequence will be found in offspring of this cell?

How many payments are needed to repay the debt : How many payments are needed to repay the debt? What is the principle repaid in the fifth year?

Firm needs to plow back its earnings to fuel growth : 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.

Playing important metabolic roles : The pentose phosphate cycle has an oxidative and a nonoxidative section and these are presented as both playing important metabolic roles

How it governance will improve effectiveness of it division : Assess how IT governance will improve the effectiveness of the IT Division to attain regulatory compliance. Develop a broad vision, an architecture.

Necessary for the metabolism of fatty acids : Why is carnitine necessary for the metabolism of fatty acids? What are "ketone bodies" and why are they important?

Substrate-level phosphorylation to transfer a phosporyl : Why phosphoenolpyruvate (PEP) can be used for substrate-level phosphorylation to transfer a phosporyl group from PEP to ADP to produce ATP and pyruvate.

User Account

All Pages