D3=0.75
D4=(0.75*1.38)=1.035
D5=(1.035*1.38)=1.4283
Value after year 5=(D5*Growth rate)/(Required rate-Growth rate)
=(1.4283*1.06)/(0.14-0.06)
=18.924975
Hence current value=Future dividend and value*Present value of discounting factor(rate%,time period)
=0.75/1.14^3+1.035/1.14^4+1.4283/1.14^5+18.924975/1.14^5
=$11.69(Approx).
9.12 Computech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence,...
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