Non constant growth
Computech Corporation is expanding rapidly and currently needs to retain a of its earnings; hence, it does not pay dividends. However, investors expect Computech to begin paying dividends, beginning with a dividend of $0.50 coming 3 years from today. The dividend should grow rapidly at a rate of 41% per year during Years 4 and 5; but after Year 5, growth should be a constant 9% per year. If the required return on Computech is 15%,
What is the value of the stock today? Round your answer to the nearest cent. Do not round your intermediate calculations. $