(Solved by Expert Tutors)Problem 7-15 Nonconstant Growth [LO 1]

Problem 7-15 Nonconstant Growth [LO 1]

Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next seven years, because the firm needs to plow back its earnings to fuel growth. The company will then pay a dividend of $14.25 per share 8 years from today?and will increase the dividend by 6.00 percent per year thereafter.

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Required:

If the required return on this stock is 14.00 percent, what is the current share price??(Do not round intermediate calculations.?Round your answer to 2 decimal places (e.g., 32.16).)

 

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Apr 19, 2020

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