Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

64 #4 Suppose the risk-free rate is 2.78% and an analyst assumes a market risk premium of 7.73%. Firm A just paid a dividend of

image text in transcribed
64 #4 Suppose the risk-free rate is 2.78% and an analyst assumes a market risk premium of 7.73%. Firm A just paid a dividend of $1.45 per share. The analyst estimates the 3 of Firm A to be 1.20 and estimates the dividend growth rate to be 4.12% forever. Firm A has 252.00 million shares outstanding. Firm B just paid a dividend of $1.53 per share. The analyst estimates the B of Firm B to be 0.79 and believes that dividends will grow at 2.24% forever. Firm B has 180.00 million shares outstanding. What is the value of Firm A? Submit Answer format: Currency: Round to: 2 decimal places. 15 Suppose the risk-free rate is 1.47% and an analyst assumes a market risk premium of 7.98%. Firm A just paid a dividend of $1.30 per share. The analyst estimates the B of Firm A to be 1.20 and estimates the dividend growth rate to be 4.56% forever. Firm A has 274.00 million shares outstanding. Firm B just paid a dividend of $1.61 per share. The analyst estimates the B of Firm B to be 0.79 and believes that dividends will grow at 2.10% forever. Firm B has 182.00 million shares outstanding. What is the value of Firm B? 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_2

Step: 3

blur-text-image_3

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

More Books

Students also viewed these Finance questions

Question

Explain duties and responsibilities of inventory manager.

Answered: 1 week ago