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Computech Corp. is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends. However, investors expect Computech to
Computech Corp. 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 $.50 coming 3 years from today. The dividend should grow rapidly at a rate of 50% per year during years 4 and 5; but after year 5, growth should be constant 6% per year. If the required return on Computech is 14%, what is the value of the stock today
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