Question: Please figure out the current intrinsic value, the expected dividend yield, and Goodwins capital gains. Goodwin Technologies, a relatively young company, has been wildly successful
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 $1.25 dividend at that time (D3-$1.25) and believes that the dividend will grow by 6.50% for the following two years (Da and Ds). However, after the fifth year, she expects Goodwin's dividend to grow at a constant rate of 3.36% per year. Goodwin's required return is 11.20%. Fill in the following chart to determine Goodwin's horizon value at the horizon date-when constant growth begins-and the current intrinsic value Term Value Horizon value Current intrinsic value $18.69 Assuming that the markets are in equilibrium, Goodwin's current expected dividend yield is Goodwin's capital gains yield is ,and
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