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

Please figure out the current intrinsic value, the expected dividend yield, and Goodwins capital gains.  Please figure out the current intrinsic value, the expected dividend yield,

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

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!