Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please answer the four drop down questions Goodwin Technologies, a relatively young company, has been wildly successful but has yet to pay a dividend. An

please answer the four drop down questions
image text in transcribed
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 $3.50000 dividend at that time (D,$3.50000) and believes tha the dividend will grow by 18.20000% for the following two years (D, and D). However, after the fift year, she expects Goodwin's dividend to grow a a constant rate of 3.90000% per year. Goodwin's required return is 13.00000%. 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. If investors expect a total return of 14,00%, 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, remember 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 OY, and CGY, -)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Behavioral Finance And Investor Types

Authors: Michael M. Pompian

1st Edition

1118011503, 978-1118011508

More Books

Students also viewed these Finance questions