Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Suppose the risk-free rate is 2.24% and an analyst assumes a market risk premium of 5.97%. Firm A just paid a dividend of $1.11 per
Suppose the risk-free rate is 2.24% and an analyst assumes a market risk premium of 5.97%. Firm A just paid a dividend of $1.11 per share. The analyst estimates the of Firm A to be 1.43 and estimates the dividend growth rate to be 4.98% forever. Firm A has 288.00 million shares outstanding. Firm B just paid a dividend of $1.59 per share. The analyst estimates the of Firm B to be 0.74 and believes that dividends will grow at 2.65% forever. Firm B has 185.00 million shares outstanding. What is the value of Firm B?
Step 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