Goodwin Technologies is a relatively young company. Goodwin has been widly successful, but it has yet to pay a dividend. An analyst has forecasted that Goodwin is likely to pay its first dividend three years from now. She expects Goodwin to pay a $3.25 dividend at that time (D3 = $3.25), and believes the dividend will grow by 16.9% for the following two years (D4 and D5). However, after five years, she expects Goodwin's dividend to grow at a constant rate of 3.84% per year. 1) If Goodwin's required return is 12.8%, what is Goodwin's horizon value at the horizon date-- when constant growth begins? 2) What is Goodwin's current intrinsic value? 3) If investors expect a total return of 13.80% what will be goodwin's expected dividend 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 DY3 and CGY3)

WHAT IS THE EXPECTED DIVIDEND YIELD (DY3)?

WHAT IS THE EXPECTED CAPITAL GAINS YIELD (CGY3)

4). Goodwin has been very successful, but it hasn't paid a dividend yet. It circulates a report to its key investors containing the following statement:

Goodwin's investment opportunities are poor.

Is this statement a possible explanation for why the firm hasn't paid a dividend yet? - Yes or no?

Please help! thank you!