14. Problem 9.14 (Nonconstant Growth)

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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 $1.25 coming 3 years from today. The dividend should grow rapidlyat a rate of 44% per yearduring Years 4 and 5, but after Year 5, growth should be a constant 6% per year. If the required return on Computech is 15%, what is the value of the stock today? Do not round intermediate calculations. Round your answer to the nearest cent.

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