Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

#4 Suppose the risk-free rate is 1.22% and an analyst assumes a market risk premium of 7.08%. Firm A just paid a dividend of $1.42

image text in transcribed

#4 Suppose the risk-free rate is 1.22% and an analyst assumes a market risk premium of 7.08%. Firm A just paid a dividend of $1.42 per share. The analyst estimates the of Firm A to be 1.27 and estimates the dividend growth rate to be 4.92% forever. Firm A has 255.00 million shares outstanding. Firm B just paid a dividend of $1.72 per share. The analyst estimates the of Firm B to be 0.88 and believes that dividends will grow at 2.55% forever. Firm B has 185.00 million shares outstanding. What is the value of Firm A? unanswered not_submitted Attempts Remaining: Infinity Submit Answer format: Currency: Round to: 2 decimal places. #5 Suppose the risk-free rate is 2.45% and an analyst assumes a market risk premium of 7.51%. Firm A just paid a dividend of $1.06 per share. The analyst estimates the of Firm A to be 1.37 and estimates the dividend growth rate to be 4.40% forever. Firm A has 253.00 million shares outstanding. Firm B just paid a dividend of $1.74 per share. The analyst estimates the of Firm B to be 0.85 and believes that dividends will grow at 2.99% forever. Firm B has 199.00 million shares outstanding. What is the value of Firm B? unanswered not_submitted Attempts Remaining: Infinity Submit Answer format: Currency: Round to: 2 decimal places

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Geography Of Finance

Authors: Gordon L. Clark, Darius Wójcik

1st Edition

0199213364, 978-0199213368

More Books

Students also viewed these Finance questions