#5 Suppose the risk-free rate is 1.91% and an analyst assumes a market risk premium of...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
#5 Suppose the risk-free rate is 1.91% and an analyst assumes a market risk premium of 7.95%. Firm A just paid a dividend of $1.48 per share. The analyst estimates the B of Firm A to be 1.48 and estimates the dividend growth rate to be 4.51% forever. Firm A has 270.00 million shares outstanding. Firm B just paid a dividend of $1.53 per share. The analyst estimates the B of Fim B to be 0.74 and belleves that dividends will grow at 2.82% forever. Firm B has 199.00 million shares outstanding. What is the value of Firm B? Submit Answer format: Currency: Round to: 2 decimal places. #5 Suppose the risk-free rate is 1.91% and an analyst assumes a market risk premium of 7.95%. Firm A just paid a dividend of $1.48 per share. The analyst estimates the B of Firm A to be 1.48 and estimates the dividend growth rate to be 4.51% forever. Firm A has 270.00 million shares outstanding. Firm B just paid a dividend of $1.53 per share. The analyst estimates the B of Fim B to be 0.74 and belleves that dividends will grow at 2.82% forever. Firm B has 199.00 million shares outstanding. What is the value of Firm B? Submit Answer format: Currency: Round to: 2 decimal places.
Expert Answer:
Related Book For
Auditing An International Approach
ISBN: 978-1259087462
7th edition
Authors: Wally J. Smieliauskas, Kathryn Bewley
Posted Date:
Students also viewed these accounting questions
-
Q5 (1pt) A bacterial cell has a solute concentration of 0.78%. Which of the following levels of solute concentration would the cell prefer to have as an external environment? a. a 0.90% solution of...
-
The risk free rate of interest on government securities in 2013 is 7.3% Required: Prepare a report for the directors of In Style Pty. Ltd assessing its: a) Profitability. b) Efficiency. |2013 |2012 y...
-
Suppose the following conditions hold. The risk free rate is 4% and the market risk premium is 6%. We have a portfolio containing three stocks and a risk-free asset. We have $50 of the risk-free...
-
Silverago Incorporated, an international metals company, reported a loss on the sale of equipment of $2 million in 2010. In addition, the companys income statement shows depreciation expense of $8...
-
In what ways do bankruptcy laws benefit the economy as a whole? The economic crisis that started in late 2007 led to a significant increase in bankruptcy filings by U.S. consumers and businesses. In...
-
Suppose the corporate income tax were eliminated and the revenue lost was made up by increasing the payroll tax rate on labor earnings. What would be the impact on labor and capital markets of such a...
-
Determine the interest on the following notes: a. $38,760 at 10 percent for 90 days b. $27,200 at 12 percent for 60 days c. $30,600 at 9 percent for 30 days d. $51,000 at 15 percent for 120 days e....
-
Assume that the step machine in SE3 is depreciated using the double-declining-balance method. How much would depreciation expense be in each year? (Round to two decimal places.) In SE3, Sunburn...
-
gooddd answer you get Upvote 2 8 9 .
-
The trial balance of Pacilio Security Services Inc. as of January 1, 2019, had the following normal balances: Cash ...............$93,380 Petty cash ............. 100 Accounts receivable ............
-
Use the properties of logarithms to condense the following expression as much as possible writing the answer as a single term with a coefficient of 1 All exponent should be positive 4 In In xy Answer...
-
Hotel maintenance is the upkeep of the various systems and components used in the hospitality industry. These systems include general building operations such as HVAC, electrical, and plumbing, but...
-
Leche Nah Corporation conducted a regression analysis of its factory overhead costs. The analysis yielded the following cost relationships: Total Factory overhead cost= Pesos (PHP) 50,000 per month +...
-
How can problems with continuous improvement programs be fixed? Explain how RCA can be applied to quality issues between suppliers, manufacturers, and retailers in the vertical supply chain. What are...
-
Davis Stores sells clothing in 15 stores located around the southwestern United States. The managers at Davis are considering expanding by opening new stores and are interested in estimating costs in...
-
How would you measure the effectiveness of a compensation function? Include in your answer at least four metrics that compensation specialist have used. Give a description on each one and explain why...
-
Annual Training Plan for resistance training
-
A certain Christmas tree ornament is a silver sphere having a diameter of 8.50 cm. Determine an object location for which the size of the reflected image is three-fourths the size of the object. Use...
-
What are two causes of misstatements?
-
What does the concept reasonable assurance refer to? How does it relate to information risk reduction?
-
Use the critical thinking framework to help resolve the confidentiality versus misleading financial statements conflict discussed in this chapter.
-
The post-implementation audit is vitally important in improving the practice of project management and the process of project management, yet it is always so difficult to get senior management and...
-
You are the project manager of a caveman group going out to hunt mastodons. Describe your efforts at risk mitigation. (Lo4)
-
You have used the three-point method to estimate the duration of an activity that you know will be critical to the project. The estimate produces a very large difference between the optimistic and...
Study smarter with the SolutionInn App