Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Show the work please. # 27 Suppose the risk-free rate is 2.21% and an analyst assumes a market risk premium of 6.22%. Firm A just
Show the work please.
# 27 Suppose the risk-free rate is 2.21% and an analyst assumes a market risk premium of 6.22%. Firm A just paid a dividend of $1.25 per share. The analyst estimates the 3 of Firm A to be 1.25 and estimates the dividend growth rate to be 4.25% forever. Firm A has 277.00 million shares outstanding. Firm B just paid a dividend of $1.79 per share. The analyst estimates the 3 of Firm B to be 0.80 and believes that dividends will grow at 2.88% forever. Firm B has 199.00 million shares outstanding. What is the value of Firm A? Submit Answer format: Currency: Round to: 2 decimal placesStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started