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Microtech Corporation is expanding rapidly, and it currently needs to retain all of its earnings, hence...

Microtech Corporation is expanding rapidly, and it currently needs to retain all of its earnings, hence it does not pay any dividends, with the first dividend of $1.00 coming 3 years from today. The dividend should grow rapidly—at a rate of 50 percent per year—during Years 4 and 5. After Year 5, the company should grow at a constant rate of 5 percent per year. The discount rate during the high dividend growth rate period is 14 percent. The discount rate during the stable dividend growth rate period is 8 percent. What is the value of the stock today?

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