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Goodwin Technologies, a relatively young company, has been wildl analyst forecasts that Goodwin is likely to pay its first dividend three years from now. She
Goodwin Technologies, a relatively young company, has been wildl analyst forecasts that Goodwin is likely to pay its first dividend three years from now. She expects $4.2500 dividend at that time (Dy-$4.2500 and believes th two years (Ds and Ds). However, after the rith year, she expects Goodwin's dividend to growat 4.08% per year. y successful but has yet to pay a dividend. An Goodwin to pay a at the dividend will grow by 22.10% for the following Goodwin's required return is 13.60% Fil 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 calaulations, carry the dividend values to four decimal places. Term Value Horizon value Current Intrinsic value $48.49 If investors expect a total return or 14.60%, what will be Goodwin's expected dividend and capital gains yield in two years-that is, the year before the firm begins paying dividends? Again, rermember to carry out the dividend values to four decimal places. (Hint: You are at year 2, and the first dividend is expected to be paid at the end of the year Find DYs and CGYs.) Expected dividend yield (DY,) Expected capital gains yield (CGYs) Goodwin has been very successful, but it hasn't paid a dividend yet. It circulates a report to its key investors
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