Growth computech corporation is expanding rapidly

Assignment Help Financial Management

Reference no: EM131897765

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 $0.50 coming 3 years from today. The dividend should grow rapidly - at a rate of 24% per year - during Years 4 and 5; but after Year 5, growth should be a constant 8% per year. 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.

Reference no: EM131897765

Questions Cloud

Create a professional development plan : In this assignment, you will compile your previous assignments, which you will revise to incorporate new insights as well as feedback from your instructor.

How english language influenced arabian countries or culture : How the english language influenced Arabian countries or culture? Match with proposal, research question, survey questions.

Oxygen reacts with octane : How many moles of CO2 are produced when 6.21 mol of oxygen reacts with octane?

Composed of nonpolar molecules and hbr : Why are H2 and Br2 composed of nonpolar molecules and HBr is composed of polar molecules?

Growth computech corporation is expanding rapidly : Nonconstant growth Computech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends.

Calculate the percent by mass of n in nh4cl : What volume in liters of 8.00×10-2 M KH2AsO4 contains 6.20 g KH2AsO4?

What must the six-month forward rate be to prevent arbitrage : Is there an arbitrage opportunity? If so, how would you exploit it? What must the six-month forward rate be to prevent arbitrage?

Carbon tetrachloride in a solution with toluene : What is the molality of carbon tetrachloride in a solution with toluene, given that the mole fraction of CCl4 in the solution is 0.200?

How do constructivist notions about learning : How do constructivist notions about learning, memory, learning goals and conditions for learning differ from the other schools of thought we have covered?

User Account

All Pages