Excel Online Structured Activity: Nonconstant growth

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\mathrm{.}75$ coming $3$ years from today. The

dividend should grow rapidly $-$ at a rate of $44\%$ per year $-$ during

Years $4$ and $5$; but after Year $5,$ growth should be a constant $8\%$

per year. The data has been collected in the Microsoft Excel Online

file below. Open the spreadsheet and perform the required

analysis to answer the question below.

$x$

Open spreadsheet

If the required return on Computech is $15\%,$ what is the value of

the stock today? Round your answer to the nearest cent. Do not

round your intermediate calculations.