Firm needs to plow back its earnings to fuel growth

Assignment Help Financial Management

Reference no: EM131342086

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 $14.25 per share dividend in year 8 and will increase the dividend by 6.00 percent per year thereafter.

Required:

If the required return on this stock is 14.00 percent, what is the current share price?

Reference no: EM131342086

Questions Cloud

Performance measures-current ratio and liquidity : Performance Measures. Information from the 2012 Form 990 and the 2013 annual report for Feeding America, follows. Although the Form 990 indicates it is for 2012, it is actually for the period July 1, 2012, to June 30, 2013, the same time period as th..

Describe the institutional racism and crime : Select any ONE of the following issues below in the discipline of criminology, criminal justice, and or administration of justice and critically address a principal debate within the areas that you have selected. Support your argument with theoret..

What are four methods of acquiring knowledge : What are four methods of acquiring knowledge? Write a short paragraph describing the essential characteristics of each.

What is an example of a sociological theory of drug use : What is an example of a sociological theory of drug use and abuse? What is an example of a psychological theory of drug use and abuse? Are these theories effective in terms of explaining why individuals choose to engage in drug use? Why or why not..

Firm needs to plow back its earnings to fuel growth : 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. If the required return on this stock is 14.00 percent, what is t..

Write a short paragraph comparing naturalistic observation : Write a short paragraph comparing naturalistic observation and true experiments.- Distinguish between descriptive and inferential statistics. Use examples to illustrate the points you make.

Describe participation in the evolution of international law : My topic is Participation in the evolution of international law.Discuss about it in detail.

Definition for sporadic in epidemiology : What is the definition for sporadic in epidemiology?

Specify the independent variable and the statistic : In each of the experiments described here, - Specify the independent variable, the dependent variable, the sample, the population, the data, and the statistic.

User Account

All Pages