Agarwal Technologies Was Founded 10 Years Ago ?
A) $15

Multiple Choice

Agarwal Technologies was founded 10 years ago.It has been profitable for the last 5 years,but it has needed all of its earnings to support growth and thus has never paid a dividend.Management has indicated that it plans to pay a $0.25 dividend 3 years from today,then to increase it at a relatively rapid rate for 2 years,and then to increase it at a constant rate of 8.00% thereafter.Management's forecast of the future dividend stream,along with the forecasted growth rates,is shown below.Assuming a required return of 11.00%,what is your estimate of the stock's current value? Use the dividend values provided in the table below for your calculations.Do not round your intermediate calculations. $$\begin{array} { l r r r r r r r } \text { Year } & 0 & 1 & 2 & 3 & 4 & 5 & 6 \\\hline \text { Growth rate } & \mathrm { NA } & \mathrm { NA } & \mathrm { NA } & \mathrm { NA } & 90.00 \% & 45.00 \% & 8.00 \% \\\text { Dividends } & \$ 0.000 & \$ 0.000 & \$ 0.000 & \$ 0.250 & \$ 0.475 & \$ 0.689 & \$ 0.744\end{array}$$
?

A) $15.62
B) $17.18
C) $11.87
D) $12.97
E) $14.22