Goodwin has a large selection of profitable investment opportunities.Is this statement a possible explanation for why the firm hasn't paid a dividend yet?O NoYes Goodwin Technologies, a relatively young company, has been wildly successful but has yet to pay a dividend. An analyst forecasts that Goodwin islikely to pay its first dividend three years from now. She expects Goodwin to pay a $2.00000 dividend at that time (D-$2.00000) and believes thatthe dividend will grow by 10.40000% for the following two years (Ds and Ds). However, after the fifth year, she expects Goodwin's dividend to grow ata constant rate of 3,54000% per year.Goodwin's required return is 11.80000%. Fill in the following chart to determine Goodwin's horizon value at the horizon date (when constant growthbegins) and the current intrinsic value. To increase the accuracy of your calculations, do not round your intermediate calculations, but round all finalanswers to two decimal places.TermHorizon valueCurrent intrinsic valueValueYAssuming that the markets are in equilibrium, Goodwin's current expected dividend yield isand Goodwin's capital gains yield isGoodwin has been very successful, but it hasn't paid a dividend yet. It orculates a report to its key investors containing the following statement:Goodwin has a large selection of profitable investment opportunities.

Dividend in year 3(D3)=$2Required return = 11.80%1st stage growth rate = 10.40%2nd stage growth rate…

Answered: Goodwin has a large selection of…

Goodwin has a large selection of profitable investment opportunities. Is this statement a possible explanation for why the firm hasn't paid a dividend yet? O No O Yes

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Concept explainers

Corporate Ethics

Ethics refers to the moral values and principles that guide an individual. Corporate ethics refers to the moral behavior of a company and its employees while conducting business. Business ethics is another name for corporate ethics. Business ethics reflects the purpose of doing the business. Business ethics is the distinction between what is right and wrong in the workplace and the selection of the right set of actions. Every corporate entity follows business ethics to a large extent in order to survive and compete successfully in the market. Corporate entities that strictly adhere to business ethics gain the trust of their stakeholders and thus gain more customers. An organization follows compliance, i.e., following certain business policies, rules, procedures, and practices to deal with the problem arising from the business environment. Business ethics also ensures that they meet compliance requirements as it was connected with the activities of an organization.

Question

Goodwin has a large selection of profitable investment opportunities.
Is this statement a possible explanation for why the firm hasn't paid a dividend yet?
O No
Yes

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 $2.00000 dividend at that time (D-$2.00000) and believes that
the dividend will grow by 10.40000% for the following two years (Ds and Ds). However, after the fifth year, she expects Goodwin's dividend to grow at
a constant rate of 3,54000% per year.
Goodwin's required return is 11.80000%. 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
Horizon value
Current intrinsic value
Value
Y
Assuming that the markets are in equilibrium, Goodwin's current expected dividend yield is
and Goodwin's capital gains yield is
Goodwin has been very successful, but it hasn't paid a dividend yet. It orculates a report to its key investors containing the following statement:
Goodwin has a large selection of profitable investment opportunities.

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