Metallica bearings, inc., is a young start-up company. no dividends will be paid on the stock over the next 11 years, because the firm needs to plow back its earnings to fuel growth. the company will pay a dividend of $17 per share exactly 12 years from today and will increase the dividend by 5.5 percent per year thereafter. if the required return on this stock is 13 percent, what is the current share price according to ddm?

according to dividend grow model the stock value today will be of 52.29

Explanation:

We will use the dividen grow model to calculate the present value ofthe future dividends whic will start 12 years from now:

d = 17

r =  0.13

g = 0.055

Intrinsic value 226,67

This is set 12 years into the future, so we will adjust using the present value of a lump sum:

principal 226.67

time     12.00

rate       0.13

PV   52.29

don't use it that much

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know