Question: Microtech is expanding rapidly. Because it needs to retain all of its earnings, it does not currently pay any dividends. Investors expect Microtech to pay

Microtech is expanding rapidly. Because it needs to retain all of its earnings, it does not currently pay any dividends. Investors expect Microtech to pay the first dividend 2 years from today. They expect the dividend to be $1.00 per share. At first dividend is expected to grow rapidly at a rate of 40% per year, during years 3 through 5. After year 5, the dividend should grow at a constant rate of 8% per year. If the required rate of return on the stock is 15%, what is the value of the stock today?

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