Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose the risk-free rate is 3.04% and an analyst assumes a market risk premium of 7 35%. Firm A just paid a dividend of $1.08

image text in transcribed

Suppose the risk-free rate is 3.04% and an analyst assumes a market risk premium of 7 35%. Firm A just paid a dividend of $1.08 per share. The analyst estimates the of Firm A to be 1.41 and estimates the dividend growth rate to be 4.05% forever. Firm A has 258.00 million shares outstanding. Firm B just paid a dividend of $1.92 per share. The analyst estimates the of Firm B to be 0.86 and believes that dividends will grow at 2.57% forever. Firm B has 183.00 million shares outstanding. What is the value of Firm B? Submit Answer format: Currency: Round to: 2 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_2

Step: 3

blur-text-image_3

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

Economics Business And Islamic Finance In ASEAN Economics Community

Authors: Patricia OrdoƱez De Pablos Mohammad Nabil Almunawar , Muhamad Abduh

1st Edition

1799822575,1799822605

More Books

Students also viewed these Finance questions

Question

2 Does a small company need a formal strategic plan?

Answered: 1 week ago

Question

1. What is employment? 2. What is the rewards for employment?

Answered: 1 week ago

Question

1. What is meant by Landslide? 2.The highest peak in Land?

Answered: 1 week ago

Question

What are the impact of sand mining in rivers ?

Answered: 1 week ago

Question

What are the important Land forms in Lithosphere ?

Answered: 1 week ago