Determining the value of the stock

Reference no: EM13973543

Microtech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends. However, investors expect Microtech 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 17% per year - during Years 4 and 5; but after Year 5, growth should be a constant 8% per year. If the required return on Microtech is 16%, what is the value of the stock today? Round your answer to the nearest cent.

Reference no: EM13973543

Questions Cloud

Student has thoroughly researched their topic. : A student reading vastly more than this minimum will be better prepared to discuss the issues in depth and consequently their report is likely to be of a higher quality. So before submitting, please read through the assessment criteria very.

Limits are the foundation of all of calculus both derivative : This assignment deals with the topic of limits and continuity. Limits are the foundation of all of calculus (both derivatives and integrals, and even played a role in the concept of continuously compounding interest in Section 5.3).

Describe the method of a study that would be conducted : The goals of this next project piece are to (1) describe the method of a (hypothetical) study that would be conducted to examine your research question and (2) write up the results of your research project based on the study variables and a set of..

Illustrate the connections among environmental health : How does the issue of access to clean water illustrate the connections among environmental health, ecological balance, and human health?

Determining the value of the stock : If the required return on Microtech is 16%, what is the value of the stock today? Round your answer to the nearest cent.

What is the magnification of the image due to lens two : What is the angle of incidence that will result in maximum polarization for light reflected from the surface of liquid of index of refraction nliquid = 1.24? Express your answer in degrees and assume that the other medium is air.

Evaluate the audit work done by the audit junior : Evaluate the audit work done by the audit junior on the weekly inventory counts and identify the audit risks and explain how each audit risk could result in a material misstatement in the financial statements. Design the audit approach for each sig..

Calculated velocities for the ball right after the collision : Based on the average measured velocity for the ball right after the collision, is it likely that the collision between the ball and the block is totally elastic?

Identify the meter texture and two other musical elements : Choose one piece from your concert to analyze. Identify the meter, texture, and two other musical elements. Reflect on the music. What emotions do you get from that piece

User Account

All Pages