Question: Ch 7 . Hwk 3 . ( 7 points ) START is a young start - up company that is plowing its operating cash flows

7 .

Hwk

3 . (7

points

)

START is a young start

-

up company that is plowing its operating cash flows back into the company and investing now to fuel future cash flow growth. Because of that, START does not plan to pay dividends for the next

9

years, but expects to pay its first dividend of $

4, 00

per share in year

10

and will increase the dividend by

4 %

per year thereafter. If investors require

12 %

return on this stock, what is its current share price?

Ch 7 . Hwk 3 . ( 7 points ) START is a young

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