Question
Suppose the risk-free rate is 2.44% and an analyst assumes a market risk premium of 6.86%. Firm A just paid a dividend of $1.20 per
Suppose the risk-free rate is 2.44% and an analyst assumes a market risk premium of 6.86%. Firm A just paid a dividend of $1.20 per share. The analyst estimates the of Firm A to be 1.23 and estimates the dividend growth rate to be 4.28% forever. Firm A has 260.00 million shares outstanding. Firm B just paid a dividend of $1.65 per share. The analyst estimates the of Firm B to be 0.74 and believes that dividends will grow at 2.83% forever. Firm B has 186.00 million shares outstanding. What is the value of Firm A? Submit Answer format: Currency: Round to: 2 decimal places.
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