Expanding rapidly-currently needs to retain all of earnings

Assignment Help Financial Management

Reference no: EM131555533

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 35% per year - during Years 4 and 5; but after Year 5, growth should be a constant 4% per year. If the required return on Computech is 12%, what is the value of the stock today? Round your answer to the nearest cent. Do not round your intermediate calculations.

Reference no: EM131555533

Questions Cloud

How does image affect ones interpretation of an organization : Discuss the concept of "image." How does image affect one's interpretation of an organization? How does it affect how one approaches organizational issues?

What is the test statistic : What is the test statistic that she should use and what is the score for that statistic?

Analyze the six images of managing change presented : Analyze the six images of managing change presented in your text. Identify the key elements each of the six images proposes for change management.

What would be the critical value : Using table 4 in the back of the book, what would be the critical value (rejection value) to test the hypothesis that the means are different?

Expanding rapidly-currently needs to retain all of earnings : Computech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends.

Draw the class diagram for your design using uml notation : Design software for Tony's store using Object-Oriented principle. Draw class diagram for your design using UML notation and briefly explain your design choices.

Why det a is the product of the n eigenvalues of a : Let A be an n X n matrix, and suppose A has n real eigenvalues, ?1,,,,,,,,, ?n, repeated according to multiplicities.

What did you learn about negotiation from the simulation : What did you learn about negotiation from the simulation? What surprised you about your behavior? Your opponents? What did you learn about yourself? About other

Magnitude of intensity of electric field : Two point charges 20µ and 80µC are 10 cm apart. Where will the electric field strength be zero on the line joining the charges from 20µ charge

User Account

All Pages