Answered step by step
Verified Expert Solution
Question
1 Approved Answer
13 nd the market risk 13. Suppose the risk-free rate is 2.15% and an analyst assumes a market risk premium of 7.85%. Firm A just
13
nd the market risk 13. Suppose the risk-free rate is 2.15% and an analyst assumes a market risk premium of 7.85%. Firm A just paid a dividend of $1.47 per share. The analyst estimates the of Firm A to be 1.44 and estimates the dividend growth rate to be 4.47% forever. Firm A has 295.00 million shares outstanding. Firm B just paid a dividend of $1.60 per share. The analyst estimates the B of Firm B to be 0.75 and believes that dividends will grow at 2.75% forever. Firm B has 197.00 million shares outstanding. What is the value of Firm A? 1. $5,992,123,556.50 b. $4,589,677,541.50 c. $5,621,627,994.50 d. $5,042,677,593.50 *4. A stock just paid a dividend of $2.99. The and then grow at 4.58% thereaft alue of the stock? $58.85 Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started