Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over

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Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next 9 years because the firm needs to plow back its earnings to fuel growth. The company will pay a dividend of $13 per share exactly 10 years from today and will increase the dividend by 5.5 percent per year thereafter. If the required return on this stock is 11 percent, what is the current share price?

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Corporate Finance Core Principles And Applications

ISBN: 9781260571127

6th Edition

Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan

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