Question
29. Suppose the risk-free rate is 1.72% and an analyst assumes a market risk premium of 6.91%. Firm A just paid a dividend of $1.1
29. Suppose the risk-free rate is 1.72% and an analyst assumes a market risk premium of 6.91%. Firm A just paid a dividend of $1.1 per share. The analyst estimates the of Firm A to be 1.41 and estimates the dividend growth rate to be 4.71% forever. Firm A has 275 million shares outstanding. Firm B just paid a dividend of $1.97 per share. The analyst estimates the of Firm B to be .84 and believes that dividends will grow at 2.58% forever. Firm B has 192 million shares outstanding. What is the value of Firm A? Answer format: Currency: Round to: 2 decimal places.
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