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

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Finance

Metallica Bearings, Inc., is a young start-up company. Nodividends will be paid on the stock over the next nine yearsbecause the firm needs to plow back its earnings to fuel growth.The company will pay a $10 per share dividend 10 years from todayand will increase the dividend by 6 percent per year thereafter. Ifthe required return on this stock is 11 percent, what is thecurrent share price?

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The question is solved using dividend discount modelThe question is solved    See Answer
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Metallica Bearings, Inc., is a young start-up company. Nodividends will be paid on the stock over the next nine yearsbecause the firm needs to plow back its earnings to fuel growth.The company will pay a $10 per share dividend 10 years from todayand will increase the dividend by 6 percent per year thereafter. Ifthe required return on this stock is 11 percent, what is thecurrent share price?

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