Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose the risk-free rate is 2.67% and an analyst assumes a market risk premium of 6.61%. Firm A just paid a dividend of $1.34 per

Suppose the risk-free rate is 2.67% and an analyst assumes a market risk premium of 6.61%. Firm A just paid a dividend of $1.34 per share. The analyst estimates the of Firm A to be 1.39 and estimates the dividend growth rate to be 4.02% 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 0.90 and believes that dividends will grow at 2.94% forever. Firm B has 195.00 million shares outstanding. What is the value of Firm B?

Answer format: Currency: Round to: 3 decimal places.

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

Essentials Of Corporate Finance

Authors: Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan

9th International Edition

1259254801, 9781259254802

More Books

Students also viewed these Finance questions

Question

1. What are Associations ?

Answered: 1 week ago

Question

1. What is socialization?

Answered: 1 week ago

Question

1. State how schools help in socialization?

Answered: 1 week ago

Question

What are the major medium of communication ?

Answered: 1 week ago