Question: 5. Reizenstein Technologies (RT) has just developed a solar panel capable of generating 200% more electricity than any solar panel currently on the market. As
5. Reizenstein Technologies (RT) has just developed a solar panel capable of generating 200% more electricity than any solar panel currently on the market. As a result, RT is expected to experience a 15% annual growth rate for the next 5 years. By then end of 5 years, other firms will have developed comparable technology, and RT 's growth rate will slow to 5% per year indefinitely. Stockholders require a return of 12% on RT's stock. They most recent annual dividend, which was paid yesterday, was $1.75 per share. (25 points) a. Calculate RT s expected dividends, for t=1,t=2,t=3,t=4 and t=5. b. Calculate the estimated intrinsic value of the stock today. Proceed by finding the present value of the dividends expected at t=1,t=2,t=3,t=4, and t=5 plus the present value of the stock price that should exist at t=5. The stock price at t=5 can be found by using the constant growth equation
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