What is the value of the stock today

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Reference no: EM13290744

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 $1.25 coming 3 years from today. The dividend should grow rapidly - at a rate of 15% per year - during Years 4 and 5, but after Year 5 growth should be a constant 4% per year. If the required return on Microtech is 16%, what is the value of the stock today? Round your answer to two decimal places.

Reference no: EM13290744

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