Question
Suppose the risk-free rate is 1.18% and an analyst assumes a market risk premium of 5.85%. Firm A just paid a dividend of $1.41 per
Suppose the risk-free rate is 1.18% and an analyst assumes a market risk premium of 5.85%. Firm A just paid a dividend of $1.41 per share. The analyst estimates the of Firm A to be 1.45 and estimates the dividend growth rate to be 4.86% forever. Firm A has 279.00 million shares outstanding. Firm B just paid a dividend of $1.87 per share. The analyst estimates the of Firm B to be 0.83 and believes that dividends will grow at 2.78% forever. Firm B has 186.00 million shares outstanding. What is the value of Firm A?
Suppose the risk-free rate is 1.51% and an analyst assumes a market risk premium of 6.66%. Firm A just paid a dividend of $1.19 per share. The analyst estimates the of Firm A to be 1.31 and estimates the dividend growth rate to be 4.54% forever. Firm A has 280.00 million shares outstanding. Firm B just paid a dividend of $1.64 per share. The analyst estimates the of Firm B to be 0.89 and believes that dividends will grow at 2.19% forever. Firm B has 196.00 million shares outstanding. What is the value of Firm B?
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