Question
#27 Suppose the risk-free rate is 2.75% and an analyst assumes a market risk premium of 5.82%. Firm A just paid a dividend of $1.40
#27
Suppose the risk-free rate is 2.75% and an analyst assumes a market risk premium of 5.82%. Firm A just paid a dividend of $1.40 per share. The analyst estimates the of Firm A to be 1.23 and estimates the dividend growth rate to be 4.48% forever. Firm A has 288.00 million shares outstanding. Firm B just paid a dividend of $1.68 per share. The analyst estimates the of Firm B to be 0.74 and believes that dividends will grow at 2.14% forever. Firm B has 195.00 million shares outstanding. What is the value of Firm A?
Answer format:Currency: Round to: 2 decimal places.
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