What is the value of the stock today


Microtech Corporation is expanding rapidly, and it currently needs to retain all of its earnings. Hence, it does not pay any dividends. However, investors expect Microtech to begin paying dividend, with the first dividend of Rs 1.00 coming 3 years from today. The dividend 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?

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