# Goodwin Technologies, a relatively young company, has been wildly .docx

• No School
• AA 1
• 5

This preview shows page 1 - 3 out of 5 pages.

Subscribe to view the full document.

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 \$2.50000 dividend at that time (D = \$2.50000) and believes that the dividend will grow by 13.00000% for the following two years (D and D). However, after the fifth year, she expects Goodwin s dividend to grow at a constant rate of 3.66000% per year. Goodwin s required return is 12.20000%. 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. Term Value Horizon value Current intrinsic value If investors expect a total return of 13.20%, 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

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern

Ask Expert Tutors You can ask 0 bonus questions You can ask 0 questions (0 expire soon) You can ask 0 questions (will expire )
Answers in as fast as 15 minutes