Question
Suppose the risk-free rate is 2.78% and an analyst assumes a market risk premium of 6.50%. Firm A just paid a dividend of $1.35 per
Suppose the risk-free rate is 2.78% and an analyst assumes a market risk premium of 6.50%. Firm A just paid a dividend of $1.35 per share. The analyst estimates the of Firm A to be 1.50 and estimates the dividend growth rate to be 4.56% forever. Firm A has 261.00 million shares outstanding. Firm B just paid a dividend of $1.52 per share. The analyst estimates the of Firm B to be 0.79 and believes that dividends will grow at 2.80% forever. Firm B has 190.00 million shares outstanding. What is the value of Firm B?
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Answer format: Currency: Round to: 2 decimal places.
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