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QUESTION

Goodwin Technologies, a relatively young company, has been wildly successful but has yet to pay a dividend. An analyst forecasts that Goodwin is...

$59.35

If investors expect a total return of 15.60%, 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 to four decimal places. (Hint: You are at year 2, and the first dividend is expected to be paid at the end of the year.Find DY3 and CGY3.)

Expected dividend yield (DY3) 9.79%

Expected capital gains yield (CGY3) 21.37%

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