All categories

3 years ago

Goodwin Technologies has been wildly successful but has yet to pay a dividend.

Business

1 answer:

nydimaria [60]3 years ago

5 0

Answer and Explanation:

The computation is shown below:

Year Cash flow PVF at 12% PV at 12%

D0 0 0 1 0

D1 0 0 0.89286 0

D2 0 0 0.79719 0

D3 2.25 2.25 0.71178 1.601505 (A)

D4 2.25 × 1.117^1 = 2.51325 0.63552 1.597221 (B)

D5 2.25 × 1.117^2 = 2.80730 0.56743 1.592946 (C)

Now

Horizon Value at D5 is

= Next Year Dividend ÷ (Required Rate -Growth rate)

= (2.25 × 1.117^2 × 1.036) ÷ (0.12 - 0.036)

34.6234 34.6234 0.56743 19.64634 (D)

Current Value 24.43801 (A + B + C + D)

Horizon Value = 34.62

Intrinsic Value = 24.43

Now

Current expected dividend yield is

= Dividend ÷ Market Price

= 0 ÷ 24 ÷ 43

= 0 %

And, the minimum expected capital yield should be equivalent to the required rate of return i.e 12%

The company should not paying the dividend because it involves various reasons lime expansion plans, seasonal & cyclical sales, buy back shares

You might be interested in

For which plan or plans is knowing the withdrawal restrictions important?

lubasha [3.4K]

I think it’s B: the 529 college savings only

6 0

3 years ago

Read 2 more answers

3. Why is it important to fill out a W4 form correctly?

olchik [2.2K]

Answer:

"so that your employer does not hold out too much or too little in taxes

Explanation:

The W-4 form tells the employer the correct amount of tax to withhold from an employee's paycheck.

7 0

3 years ago

Read 2 more answers

In the past 20 years the United States has entered into several "free trade agreements." The commonality of these free trade agr

Wewaii [24]

Answer:

A specific trade agreement would be the US - Colombia trade agreement, which was signed on 2006.

Explanation:

This trade agreement reduced 80% of tariffs that used to applied to goods exported from the U.S. to Colombia, and from Colombia to the U.S.

The agreement benefits consumers in both countries because it allows each country to specialize in the production of those goods that they do best, for example, coffee in the case of Colombia, and industrial goods in the case of the United States.

However, because the United States is a much more powerful country, with a higher level of development, consumers in the US have benefited more than Colombian consumers.

8 0

4 years ago

Traxx is a newly emerging shoe manufacturing company. After extensive market research, Traxx divides its market into professiona

postnew [5]

Answer:

<em>Segmentation</em>

Explanation:

Market segmentation <em>is the method of separating into factions or parts a market of potential customers based on the various features.</em>

The divisions produced are made up of customers who react to marketing campaigns in a similar manner and share characteristics such as similar tastes, preferences, or locations.

7 0

4 years ago

When a partnership is terminated, the assets are turned into cash, and obligations are paid .dissolution. termination. realizati

insens350 [35]

The correct option is NONE OF THE ABOVE.
When a partnership is terminated, the assets are are turned into cash and obligations are paid, the partnership is said to be WIND UP.
A partnership refers to a business relationship that involves two or more persons. A partnership dissolution is said to occur when one of the partners leaves the business. A partnership is said to be terminated when it stop operations. Partnership winding up involves the sales of the assets of the business, the payment of their business debts from the proceeds and the sharing of the remaining proceeds.

6 0

4 years ago

Read 2 more answers