PS 29

Suppose the risk-free rate is 2.56% and an analyst assumes a market risk premium of 6.89%. Firm A just paid a dividend of $1.06 per share. The analyst estimates the of Firm A to be 1.42 and estimates the dividend growth rate to be 4.36% forever. Firm A has 290.00 million shares outstanding. Firm B just paid a dividend of $1.54 per share. The analyst estimates the of Firm B to be 0.73 and believes that dividends will grow at 2.62% forever. Firm B has 198.00 million shares outstanding. What is the value of Firm A?