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Company Y, a rapidly growing technology firm, is not expected to pay dividends for the next three years. At the end of the third year,
Company Y, a rapidly growing technology firm, is not expected to pay dividends for the next three years. At the end of the third year, the firm will start paying dividends of $1 per share, and these dividends are expected to grow at the supernormal rate of 40% per year for three years, after which the firm's dividends are expected to grow at a slower rate of 8% per year. If required return on similar technology firms is 17%, what is the current value of Company Y stock?
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