A. 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 $0.50 coming 3 years from today. The dividend should grow rapidly - at a rate of 23% per year - during Years 4 and 5; but after Year 5, growth should be a constant 9% per year. If the required return on Computech is 13%, what is the value of the stock today? Round your answer to the nearest cent. Do not round your intermediate calculations.
B. Scampini Technologies is expected to generate $50 million in free cash flow next year, and FCF is expected to grow at a constant rate of 3% per year indefinitely. Scampini has no debt or preferred stock, and its WACC is 14%. If Scampini has 35 million shares of stock outstanding, what is the stock's value per share? Round your answer to two decimal places.
How much is each share of common stock is worth according to the corporate valuation model?