Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose the risk-free rate is 2.48% and an analyst assumes a market risk premium of 6.44%. Firm A just paid a dividend of $1.17 per

Suppose the risk-free rate is 2.48% and an analyst assumes a market risk premium of 6.44%. Firm A just paid a dividend of $1.17 per share. The analyst estimates the of Firm A to be 1.37 and estimates the dividend growth rate to be 4.37% forever. Firm A has 274.00 million shares outstanding. Firm B just paid a dividend of $1.67 per share. The analyst estimates the of Firm B to be 0.87 and believes that dividends will grow at 2.51% forever. Firm B has 185.00 million shares outstanding. What is the value of Firm B?

Answer format: Currency: Round to: 2 decimal place

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

Banking Secrecy And Global Finance

Authors: Donato Masciandaro, Olga Balakina

1st Edition

1137400099, 978-1137400093

More Books

Students also viewed these Finance questions