9. 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 $3.75000 dividend at that time (D3=$3.75000) and befieves that the dividend will arow by 19.50000% for the following two years (D. and Ds). However, after the fifth year, she expects Goodwin's dividend to grow at a constant rate of 3.96000% per year. Goodwin's required return is 13.20000%. Fill in the following chart to determine Goodwin's horizon value at the horizon date (when constant growth begins) and the current intrinsic value. To increase the accuracy of your calculations, do not round your intermedlate calculations, but round all final answers to two decimal places. Term Horizon value current intrinsic value Assumino that the markets $60.25 dilbrium, Goodwin's current expected dividend yield is , and Goodwin's capital gains vield is Goodwin has been very suc $72.30 tit hasnt paid a dividend yet. It drculates a report to its key investors containing the followine statement: Investors prefer the deferred tax liablity that capital gains offer over dividendi. Is this statement a possible explanation for why the fim hasnt paid a dividend 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 $3.75000 dividend at that time (Dz = $3.75000) and believes that the dividend will grow by 19.50000% for the following two years (D. and Ds). However, after the fifth year, she expects Goodwin's dividend to grow at a constant rate of 3.96000% per year. Goodwin's required return is 13.20000%. Fill in the following chart to determine Goodwin's horizon value at the horizon date (when constant growth. begins) and the current intrinsic value. To increase the accuracy of your calculations, do not round your intermediate calculations, but round all final answers to two decimal places. \begin{tabular}{|l|l|} \hline Assuming that the markets & $41.89 \\ \hline & $13.20 \\ \hline Gilibrium, Goodwin's current expected dividend yield is \\ \hline Goodwin has been very suc & $38.02 \\ \hline \end{tabular} Investors prefer the deferred tax liablity that capital gains offer over dividends. Is this itatement a possible explanatlon for why the firm hasn't paid a dividend 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 $3.75000 dividend at that time (D) = $3.75000) and believes that the dividend will grow by 19.50000% for the following two years (Du and Ds). However, after the fitth year, she expects Goodwin's dividend to grow at a constant rate of 3.96000% per year. Goodwin's required return is 13.20000\%. Fill in the following chart to determine Goodwin's horizon value at the horizon date (when constant growth begins) and the current intrinsic value. To increase the accuracy of your calculations, do not round your intermediate calculations, but round all final answers to two decimal places. Assuming that the markets are in equilibrium, Goodwin's current expected dividend yield is , and Goodwin's capital gains yield is Goodwin has been very successful, but it hasn't pald a dividend vet. It circulates a report to 0.00% Investors prefer the deferred tax liability that capital gains offer over dividends. Is this statement a possible explanation for why the firm hasn't paid a dividend 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 $3.75000 dividend at that time (Da = $3.75000) and believes that the dividend will arow by 19.50000% for the following two years (D. and Di). However, after the fifth year, she expects Goodwin's dividend to grow at a constant rate of 3.96000% per year. Goodwin's required return is 13,20000\%. Fill in the following chart to determine Goodwin's horizon value at the horizon date (when constant growth begins) and the current intrinsic value. To increase the accuracy of your calculations, do not round your intermediate calculations, but round all final answers to two decimal places. Assuming that the markets are in equilibrium, Goodwin's current expected dividend yield is and Goodwin is capital gains yield is men very successful, but it hasn't paid a dividend yet, It circulates a report to its koy investors containing the foliowing statement: refer the deferred tax liability that capital gains olfer over dividends. Is this statement a possible explanation for why the firm hasn't pald a dividend vet? No
