Problem:
King Schultz Dentures, 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 $15 per share dividend in 10 years and will increase the dividend by 5 percent per year thereafter.
Required:
Question: If the required return on this stock is 10.5 percent, what is the current share price?
Note: Explain all steps comprehensively.