1 Nonconstant growth 2 3 Year 3 Dividend, D3 4 Supernormal growth rate, gs 5 Normal growth rate, gn 6 Required return, is 7 $1.50 39.00% 9.00% 16.00% 39.00% 4 39.00% 5 9.00% 6 0 8 1 0 2 0 3 $1.50 9 Dividends 10 P5 0 0 11 Cash flows to common stockholders 12 13 PV of cash flows to common stockholders 14 Stock Price, Po 15 16 Alternatively, using Excel NPV function: 17 Stock Price, Po 18 19 stivate Window 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 $1.50 coming 3 years from 3 today. The dividend should grow rapidly - at a rate of 39% per year - during Years 4 and 5; but after Year 5, growth should be a constant 9% per year. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below. X Open spreadsheet 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. $ 24.80 X