Calculate a price for Softek assuming Alpha is successful and Beta is also successful but doesn’t do quite as well as Alpha. Assume Softek grows at 25% for two years and then at 18% for two more. After that it continues to grow at 6%. A leader in the computer software field. Softek has two potentially big-selling products under development. Alpha, the first new product, seems very likely to catch on and is expected to drive the firm’s growth rate to 25% for the next two years. However, software products have short lives, and growth can be expected to return to a more normal rate of 6% after that period if something new isn’t launched immediately. Beta, the second product, is a logical follow-on, but management isn’t as confident about its success as it is about Alpha’s. Softek’s most recent yearly dividend was $4, and firms in the industry typically return 14% on stockholder investments.