Investors expect computech to begin paying dividends

Assignment Help Financial Management

Reference no: EM132029500

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 17% per year-during Years 4 and 5; but after Year 5, growth should be a constant 5% 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: EM132029500

Questions Cloud

Create an excel spreadsheet of lp model : Create an EXCEL spreadsheet of LP model showing attention to both accuracy and presentation. Use Analytic Solver Platform to find optimal solution.

Limitations related to deductibility of investment losses : Explain the criteria and limitations related to the deductibility of investment losses. What is meant by the term “at-risk”?

On which test did he do better relative to the rest : He received a score of 72 on a biology test for which the class mean was 70 with standard deviation 8.

For what value of p is the distribution symmetric : Consider a binomial distribution with 10 trials. For what value of p is the distribution symmetric? p =

Investors expect computech to begin paying dividends : However, investors expect Computech to begin paying dividends, beginning with a dividend of $0.50 coming 3 years from today.

What hypothesis test should you use for this problem : Test the claim that the proportion of wins at home is greater than on the road. Use the a = 0.01 significance level.

Chemical process is licensed to produce high-octane : A chemical process is licensed to produce high-octane, low Sulphur blend-stocks domestically and internationally.

How much is in the account at the end of the 6 years : $600 are deposited into an account monthly for six years at an interest rate of 7% compounded monthly. How much is in the account at the end of the 6 years?

What is the probability that at least one crime : (a) What is the probability that none of the crimes will ever be solved? (Round to three decimal places.)

User Account

All Pages