What is the intrinsic value of the stock

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Rocking technologies (RT) have just developed a solar panel capable of generating 200% more electricity than any solar panel currently on the market. As a result, RT is expected to experience a 15% annual growth rate for the next 5 years. By the end of 5 years, other firms will have developed comparable technology and RT’s growth rate will slow to 5% per year indefinitely. Stockholders require a return of 6% on RT’s stock. The most recent annual dividend (D0) which was paid yesterday was $1.55 per share. a. What are the expected dividends for years 1 to 5? b. What is the intrinsic value of the stock (P0)?

Reference no: EM131084186

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