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Business, 02.04.2021 03:50 OnlyaBurden

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 $1.50 coming 3 years from today. The dividend should grow rapidly - at a rate of 31% 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 14%, what is the value of the stock today

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Computech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence,...
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