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eBook Problem Walk-Through Computech Corporation is expanding rapidly and currently needs to retain all of its earnings;
Posted: Sun Jul 03, 2022 12:52 pm
by answerhappygod
- Ebook Problem Walk Through Computech Corporation Is Expanding Rapidly And Currently Needs To Retain All Of Its Earnings 1 (13.66 KiB) Viewed 15 times
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.