Question
a.) Suppose the risk-free rate is 3.73% and an analyst assumes a market risk premium of 6.57%. Firm A just paid a dividend of $1.35
a.) Suppose the risk-free rate is 3.73% and an analyst assumes a market risk premium of 6.57%. Firm A just paid a dividend of $1.35 per share. The analyst estimates the of Firm A to be 1.23 and estimates the dividend growth rate to be 4.92% forever. Firm A has 264.00 million shares outstanding. Firm B just paid a dividend of $1.68 per share. The analyst estimates the of Firm B to be 0.90 and believes that dividends will grow at 2.07% forever. Firm B has 181.00 million shares outstanding. What is the value of Firm A?
b.) Suppose the risk-free rate is 2.89% and an analyst assumes a market risk premium of 6.66%. Firm A just paid a dividend of $1.36 per share. The analyst estimates the of Firm A to be 1.23 and estimates the dividend growth rate to be 4.98% forever. Firm A has 294.00 million shares outstanding. Firm B just paid a dividend of $1.81 per share. The analyst estimates the of Firm B to be 0.71 and believes that dividends will grow at 2.18% forever. Firm B has 196.00 million shares outstanding. What is the value of Firm B?
SHOW ANSWERS CLEARLY AND WRITE THEM OUT INTO THEIR FULL FORM!!!
example: NO!!! 5.88 MILLION WRITE IT ALL OUT PLEASE!!! show all decimal places
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