Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose the risk-free rate is 1.46% and an analyst assumes a market risk premium of 7.68%. Firm A just paid a dividend of $1.30 per

image text in transcribed
Suppose the risk-free rate is 1.46% and an analyst assumes a market risk premium of 7.68%. Firm A just paid a dividend of $1.30 per share. The analyst estimates the of Firm A to be 1.36 and estimates the dividend growth rate to be 4.12% forever. Firm A has 263.00 million shares outstanding. Firm B just paid a dividend of $1.91 per share. The analyst estimates the of Firm B to be 0.74 and believes that dividends will grow at 2.38% forever. Firm B has 187.00 million shares outstanding. What is the value of Firm B? Answer format: Currency: Round to: 2 decimal places

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

Family Inc Using Business Principles To Maximize Your Familys Wealth

Authors: Douglas P. McCormick

1st Edition

1119577411, 978-1119577416

More Books

Students also viewed these Finance questions