Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next 7 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 percent per year thereafter.
If the required return on this stock is 14 percent, what is the current share price?
