7 . Stocks that don't pay dividends yet Goodwin Technologies, a relatively young company, has been wildly successful but has yet to pay a dividend. An analyst forecasts that Goodwin is likely to pay its first dividend three years from now. She expects Goodwin to pay a $4.75 dividend at that time (O3=$4.75) and believes that the dividend will grow by 24.70% for the following two years ( D4 and D5 ). However, after the fifth year, she expects Goodwin's dividend to grow at a constant rate of 4.20% per year. Goodwin's required return is 14.00%. Fill in the following chart to determine Goodwin's horizon value at the horizon date-when constant growth begins-and the current intrinsic value. If investors expect a total return of 15.00%, what will be Goodwin's expected dividend yield and capital gains yield in two years-that is, the year before the firm begins paying dividends? (Hint: You are at Year 2 , and the first dividend is expected to be paid at the end of the year. Find DY, and CGY.) Expected dividend yield (OY OY3 ) Expected capital gains yield (CGY)