Question
Suppose the risk-free rate is 1.52% and an analyst assumes a market risk premium of 7.83%. Firm A just paid a dividend of $1.31 per
Suppose the risk-free rate is 1.52% and an analyst assumes a market risk premium of 7.83%. Firm A just paid a dividend of $1.31 per share. The analyst estimates the of Firm A to be 1.47 and estimates the dividend growth rate to be 4.68% forever. Firm A has 290.00 million shares outstanding. Firm B just paid a dividend of $1.95 per share. The analyst estimates the of Firm B to be 0.71 and believes that dividends will grow at 2.28% forever. Firm B has 190.00 million shares outstanding. What is the value of Firm B?
Suppose the risk-free rate is 3.82% and an analyst assumes a market risk premium of 7.68%. Firm A just paid a dividend of $1.15 per share. The analyst estimates the of Firm A to be 1.29 and estimates the dividend growth rate to be 4.24% forever. Firm A has 255.00 million shares outstanding. Firm B just paid a dividend of $1.77 per share. The analyst estimates the of Firm B to be 0.72 and believes that dividends will grow at 2.39% forever. Firm B has 184.00 million shares outstanding. What is the value of Firm A?
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