Microtech corporation is increasing rapidly and currently, Ask an Expert

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problem: Microtech Corporation is increasing rapidly and currently requires retain all of its earnings; hence it does not pay dividends. However, investors expect Microtech to begin paying dividends, starting with a dividend of $1.00 coming three years from today. The dividend should grow quickly - at a rate of 16% per year - during Years 4 & 5, but after Year 5 growth should be a constant 4 percent per year. If the required return on Microtech is 14%, find out the value of the stock today? Give your answer to the nearest hundredth.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M919758

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