Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock...
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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 pay a $14 per share dividend 10 years from today and will increase the dividend by 3.9 percent per year thereafter. If the required return on this stock is 12.5 percent, what is the current share price? Future dividend Years until first dividend Dividend growth rate Required return $ 14.00 10 3.9% 12.5% Complete the following analysis. Do not hard code values in your calculations. Stock price in 9 years Stock price today 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 pay a $14 per share dividend 10 years from today and will increase the dividend by 3.9 percent per year thereafter. If the required return on this stock is 12.5 percent, what is the current share price? Future dividend Years until first dividend Dividend growth rate Required return $ 14.00 10 3.9% 12.5% Complete the following analysis. Do not hard code values in your calculations. Stock price in 9 years Stock price today
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To calculate the current share price stock price today we need to find the present value of all futu... View the full answer
Related Book For
Fundamentals of corporate finance
ISBN: 978-0073382395
9th edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
Posted Date:
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