Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on thestock over the next 7 years because the firm needs to plow back its earnings to fuelgrowth. The company will pay a $11.06 per share dividend in 8 years and will increasethe dividend by 0.03 per year thereafter. If the required return on this stock is 0.09,what is the current share price? Answer with 2 decimals (e.g. 45.45). The next dividend payment by Hot Wings, Inc., will be $1.31 per share. The dividendsare anticipated to maintain a 0.07 growth rate forever. If the stock currently sells for$40 per share, what is the required return? Anser with 4 decimals (e.g. 0.1234)

According to bartleby guidelines , if multiple questions are sked , then 1st question needs to be…

Answered: Metallica Bearings, Inc., is a young…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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