Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please show the whole number. #5 unanswered not_submitted Suppose the risk-free rate is 3.37% and an analyst assumes a market risk premium of 7.68%. Firm

image text in transcribedimage text in transcribed

Please show the whole number.

#5 unanswered not_submitted Suppose the risk-free rate is 3.37% and an analyst assumes a market risk premium of 7.68%. Firm A just paid a dividend of $1.01 per share. The analyst estimates the of Firm A to be 1.25 and estimates the dividend growth rate to be 4.71% forever. Firm A has 274.00 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 2.31% forever. Firm B has 180.00 million shares outstanding. What is the value of Firm B? Attempts Remaining: Infinity Submit Answer format: Currency: Round to: 2 decimal places. #5 reattempted incorrect Suppose the risk-free rate is 2.55% and an analyst assumes a market risk premium of 6.99%. Firm A just paid a dividend of $1.02 per share. The analyst estimates the of Firm A to be 1.49 and estimates the dividend growth rate to be 4.80% forever. Firm A has 286.00 million shares outstanding. Firm B just paid a dividend of $1.55 per share. The analyst estimates the of Firm B to be 0.75 and believes that dividends will grow at 2.78% forever. Firm B has 181.00 million shares outstanding. What is the value of Firm B? Correct Answer: $5,752,604,289.28 Points: 0 More Details Attempts Remaining: Infinity 5252.18 Submit Answer format: Currency: Round to: 2 decimal places. Show Hint

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 Routledge Handbook Of State Owned Enterprises

Authors: Luc Bernier, Massimo Florio, Philippe Bance

1st Edition

1138487694, 978-1138487697

More Books

Students also viewed these Finance questions

Question

What are operating activities? Give one example.

Answered: 1 week ago

Question

What lessons in intervention design, does this case represent?

Answered: 1 week ago