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a. Suppose the risk-free rate is 2.62% and an analyst assumes a market risk premium of 6.39%. Firm A just paid a dividend of $1.36

a. Suppose the risk-free rate is 2.62% and an analyst assumes a market risk premium of 6.39%. Firm A just paid a dividend of $1.36 per share. The analyst estimates the of Firm A to be 1.50 and estimates the dividend growth rate to be 4.82% forever. Firm A has 284.00 million shares outstanding. Firm B just paid a dividend of $1.62 per share. The analyst estimates the of Firm B to be 0.82 and believes that dividends will grow at 2.22% forever. Firm B has 189.00 million shares outstanding. What is the value of Firm A?

b. Suppose the risk-free rate is 2.05% and an analyst assumes a market risk premium of 7.13%. Firm A just paid a dividend of $1.30 per share. The analyst estimates the of Firm A to be 1.44 and estimates the dividend growth rate to be 4.87% forever. Firm A has 271.00 million shares outstanding. Firm B just paid a dividend of $1.54 per share. The analyst estimates the of Firm B to be 0.79 and believes that dividends will grow at 2.51% forever. Firm B has 196.00 million shares outstanding. What is the value of Firm B?

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