Question
Help !! A. Suppose the risk-free rate is 2.50% and an analyst assumes a market risk premium of 6.84%. Firm A just paid a dividend
Help !!
A. Suppose the risk-free rate is 2.50% and an analyst assumes a market risk premium of 6.84%. Firm A just paid a dividend of $1.27 per share. The analyst estimates the of Firm A to be 1.35 and estimates the dividend growth rate to be 4.94% forever. Firm A has 282.00 million shares outstanding. Firm B just paid a dividend of $1.94 per share. The analyst estimates the of Firm B to be 0.78 and believes that dividends will grow at 2.64% forever. Firm B has 199.00 million shares outstanding. What is the value of Firm B? Round to 2 decimals
B. Suppose the risk-free rate is 3.61% and an analyst assumes a market risk premium of 6.60%. Firm A just paid a dividend of $1.32 per share. The analyst estimates the of Firm A to be 1.43 and estimates the dividend growth rate to be 4.08% forever. Firm A has 253.00 million shares outstanding. Firm B just paid a dividend of $1.99 per share. The analyst estimates the of Firm B to be 0.79 and believes that dividends will grow at 2.88% forever. Firm B has 180.00 million shares outstanding. What is the value of Firm A? Round to 2 decimals
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