Problem WalkThrough Computech Corporation is expanding rapid

Problem Walk-Through Computech Corporation is expanding rapidly and currently needs to retain all of its coming 3 years from today. The dividend should grow rapdrat a rate of 30% year-dunng Years 4 and 5a bt after year s, gwith should be .contrhk perver rmerea truena.Camachaik atarathe value of the stock today? Do not round intermediate caloulations. Round your enswer to the nearest cent eamngs; herce, it does not pay dvidends. Howeve, mesters expect Comptech bo begn parre dvdends. Ieprnng adedend d ?1.00

Solution

Value = 26.46

Discount rate	14.0000%
Cash flows	Year	Discounted CF= cash flows/(1+rate)^year	Cumulative cash flow
-	0	-	-
-	1	-	-
-	2	-	-
1.000	3	0.67	0.67
1.300	4	0.77	1.44
1.690	5	0.88	2.32
46.475	5	24.14	26.46