What is the length of the annuity time period

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1. Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next 7 years because the firm needs to plow back its earnings to fuel growth. The company will pay a $3.44 per share dividend in 8 years and will increase the dividend by 0.05 per year thereafter. If the required return on this stock is 0.11, what is the current share price? Answer with 2 decimals (e.g. 45.45).

2. You are considering an annuity which costs $88,500 today. The annuity pays $5,000 a year. The rate of return is 5 percent. What is the length of the annuity time period? (Do not round intermediate calculations.)

Reference no: EM132003406

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