Question
Reizenstein Technologies (RT) has just developed a solar panel capable of generating 200% more electricity than any solar panel currently on the market. As a
Reizenstein Technologies (RT) has just developed a solar panel capable of generating 200% more electricity than any solar panel currently on the market. As a result, RT is expected to experience a 18% annual growth rate for the next 5 years. By the end of 5 years, other firms will have developed comparable technology, and RTs growth rate will slow to 7% per year indefinitely. Stockholders require a return of 18% on RTs stock. The most recent annual dividend (D0), which was paid yesterday, was $1.50 per share. Calculate the estimated intrinsic value of the stock today, P0.
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