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Blossom Infotech is a fast-growing communications company. The company did not pay a dividend last year and is not expected to do so for the
Blossom Infotech is a fast-growing communications company. The company did not pay a dividend last year and is not expected to do so for the next two years. Last year the companys growth accelerated, and management expects to grow the business at a rate of 45 percent for the next five years before growth slows to a more stable rate of 7 percent. In the third year, management has forecasted a dividend payment of $1.20. Dividends will grow with the company thereafter.
What is the current value of this stock? required rate of return is 17%
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