What is value of the stock today

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Microtech Corporation is expanding rapidly, and it currently need to retain all of its earnings; hence it does not pay any dividends. However, investors expect Mircrotech to begin paying dividends, with the first dividend of $1.00 coming 3 years from today. The dividends should grow rapidly – at a rate of 50% per year – during years 4 and 5. After year 5, the company should grow at a constant rate of 8% per year. If the required return on the stock is 15%, what is the value of the stock today? Show your work.

Reference no: EM132037995

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