Question

PLEASE HELP ME FILL IN THE BOX WITH AN EXCEL FUNCTION?

? X - Sign In FILE HOME Arial Calculating stock price - Excel INSERT PAGE LAYOUT FORMULAS DATA REVIEW VIEW -12 = % p U . - A - Alignment Number conditional Format Cell Formatting as Table Styles Font Styles A À Paste B I Cells Editing Clipboard D16 А в D E F G H I J Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next nine years because the firm needs to plow back its earnings to fuel growth. The company will pay a $14 per share dividend 10 years from today and will increase the dividend by 3.9 percent per year thereafter. If the required return on this stock is 12.5 percent, what is the current share price? 14.00 10 Future dividend Years until first dividend Dividend growth rate Required return 3.9% 12.5% Complete the following analysis. Do not hard code values in your calculations. Stock price in 9 years $ 162.79 Stock price today Sheet1 READY @ - H + 100% Attempt(s) 1/3 Hint Step: If no dividends are paid in the interim, the stock price today is the present value of the future stock price.

Answer 1

P9 010/(Ke-g) 14/(0.125-0.039) $ 162.79 Stock price in 9 years Stock price today Dividend at year 10 Required return Growth rate Stock price in 9 years $ 162.79 b) PO P9/keng 162.79/1.12519 $ 56.40 Stock price today 56.40

Answer 2

=PV(D9,D7-1,,-D14)