Dylan Bearings is a young start-up company. No dividends will be paid on the shares over the

Question:

Dylan Bearings is a young start-up company. No dividends will be paid on the shares over the next 9 years because the firm needs to plough back its earnings to fuel growth. The company will pay an £8 per share dividend in 10 years and will increase the dividend by 6 per cent per year thereafter. If the required return is 13 per cent, what is the current share price?

Fantastic news! We've Found the answer you've been seeking!