Question
Suppose the risk-free rate is 2.55% and an analyst assumes a market risk premium of 6.14%. Firm A just paid a dividend of $1.18 per
Suppose the risk-free rate is 2.55% and an analyst assumes a market risk premium of 6.14%. Firm A just paid a dividend of $1.18 per share. The analyst estimates the of Firm A to be 1.27 and estimates the dividend growth rate to be 4.10% forever. Firm A has 270.00 million shares outstanding. Firm B just paid a dividend of $1.86 per share. The analyst estimates the of Firm B to be 0.73 and believes that dividends will grow at 2.06% forever. Firm B has 182.00 million shares outstanding. What is the value of Firm A? Answer Format: Currency: Round to: 2 decimal places thank you and please show work :)
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