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Suppose the risk - free rate is 3 . 5 4 % and an analyst assumes a market risk premium of 6 . 1 1
Suppose the riskfree rate is and an analyst assumes a market risk premium of Firm A just paid a dividend of $ per share. The analyst estimates the beta of Firm A to be and estimates the dividend growth rate to be forever. Firm A has million shares outstanding. Firm B just paid a dividend of $ per share. The analyst estimates the beta of Firm B to be and believes that dividends will grow at forever. Firm B has million shares outstanding. What is the value of Firm A
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