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 $0.50 coming 3 years from today. The dividend should grow rapidly-at a rate of 16% per year-during Years 4 and 5, but after Year 5, growth should be a constant 9% per year. Calculate the stock price PO 3. Stock valuation Nonconstant growth Year 3 Dividend, D3 Supernormal growth rate, gs Normal growth rate, gn Required return, rs $1.25 47.00% 9.00% 12.00% Growth rates Years Dividends P5 Cash flows to common stockholders 16.00%) 16.00% 9.00% 0 2 4 5 0 0$0.50 0 0 sum rows 38 and 39 Stock Price, PO using NPV