- Ebook Problem Walk Through Computech Corporation Is Expanding Rapidly And Currently Needs To Retain All Of Its Earnings 1 (13.66 KiB) Viewed 13 times
eBook Problem Walk-Through Computech Corporation is expanding rapidly and currently needs to retain all of its earnings;
-
answerhappygod
- Site Admin
- Posts: 899603
- Joined: Mon Aug 02, 2021 8:13 am
eBook Problem Walk-Through Computech Corporation is expanding rapidly and currently needs to retain all of its earnings;
eBook Problem Walk-Through 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 $2.00 coming 3 years from today. The dividend should grow rapidly-at a rate of 37% per year-during Years 4 and 5, but after Year 5, growth should be a constant 6% per year. If the required return on Computech is 14%, what is the value of the stock today? Do not round intermediate calculations. Round your answer to the nearest cent.