Question
#23 Suppose the risk-free rate is 1.38% and an analyst assumes a market risk premium of 7.86%. Firm A just paid a dividend of $1.47
#23 Suppose the risk-free rate is 1.38% and an analyst assumes a market risk premium of 7.86%. Firm A just paid a dividend of $1.47 per share. The analyst estimates the of Firm A to be 1.35 and estimates the dividend growth rate to be 4.29% forever. Firm A has 253.00 million shares outstanding. Firm B just paid a dividend of $1.52 per share. The analyst estimates the of Firm B to be 0.90 and believes that dividends will grow at 2.42% forever. Firm B has 199.00 million shares outstanding. What is the value of Firm A?
Answer format: Currency: Round to: 2 decimal places.
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