What is the price of the stock nine years from today

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Reference no: EM131047239

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 $14.50 per share 10 years from today and will increase the dividend by 5 percent per year thereafter. The required return on the stock is 13 percent. Required: What is the price of the stock 9 years from today? What is the current share price?

Reference no: EM131047239

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