Computech Corportation is expanding rapidly and cutrently needs to retain all of of its earnings; hence, it does not pay dividends. However, investors expect Computech to begin paying dividens, beginning with a dividend of $1.25 coming 3 years from today. The dividend should grow rapidly - at a rate of 38% per year - during years 4 & 5; but after year 5, growth should be a constant 6% per year. The data has been collected in the Microsoft Excel.

If the required return on Computech is 12% what is the value of the stock today? Round answrr to nearest cent.

C Nonconstant growth F G $125 38.00% 60096 12009 38.00% 38.000 0 600% 1 2 0 3 $125 0 3 Year 3 Dividend, D 4 Supernommal growth rito, S Nomal growth rate 6. Required totum to 7 8 9 Dividends 10 PS 11 Cash flows to common stockholders 12 13 Pot cash flows to common stockholders 14 Stock Pro, P 15 16 Alternatively, using Excel NPV function 17 Stock Price. Po 18 19 20 Formulas 2 0 0 38 00 6.00 0 2 3 $12500 38.00 4 NA 2 Dividends 2P 25 Cash Bows to common stockholders 26 5 WNA WNIA NA WA Sheet + C Nonconstant growth F G $125 38.00% 60096 12009 38.00% 38.000 0 600% 1 2 0 3 $125 0 3 Year 3 Dividend, D 4 Supernommal growth rito, S Nomal growth rate 6. Required totum to 7 8 9 Dividends 10 PS 11 Cash flows to common stockholders 12 13 Pot cash flows to common stockholders 14 Stock Pro, P 15 16 Alternatively, using Excel NPV function 17 Stock Price. Po 18 19 20 Formulas 2 0 0 38 00 6.00 0 2 3 $12500 38.00 4 NA 2 Dividends 2P 25 Cash Bows to common stockholders 26 5 WNA WNIA NA WA Sheet +