Computech corporation is expanding rapidly and currently


Computech Corporation is expanding rapidly and currently needs to retain all 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 16% per year-during Years 4 and 5; but after Year 5, growth should be a constant 8% per year. If the required return on Computech is 16%, what is the value of the stock today? Round your answer to the nearest cent. Do not round your intermediate calculations.

Request for Solution File

Ask an Expert for Answer!!
Financial Management: Computech corporation is expanding rapidly and currently
Reference No:- TGS02813647

Expected delivery within 24 Hours