Question: 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 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 dividends soon, with the first dividend of $1 coming 3 years from today. The dividends 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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