Question
Suppose the risk-free rate is 3.07% and an analyst assumes a market risk premium of 6.42%. Firm A just paid a dividend of $1.12 per
Suppose the risk-free rate is 3.07% and an analyst assumes a market risk premium of 6.42%. Firm A just paid a dividend of $1.12 per share. The analyst estimates the of Firm A to be 1.36 and estimates the dividend growth rate to be 4.47% forever. Firm A has 286.00 million shares outstanding. Firm B just paid a dividend of $1.81 per share. The analyst estimates the of Firm B to be 0.82 and believes that dividends will grow at 2.46% forever. Firm B has 180.00 million shares outstanding. What is the value of Firm A?
Suppose the risk-free rate is 1.25% and an analyst assumes a market risk premium of 6.18%. Firm A just paid a dividend of $1.18 per share. The analyst estimates the of Firm A to be 1.50 and estimates the dividend growth rate to be 4.99% forever. Firm A has 284.00 million shares outstanding. Firm B just paid a dividend of $1.72 per share. The analyst estimates the of Firm B to be 0.89 and believes that dividends will grow at 2.85% forever. Firm B has 192.00 million shares outstanding. What is the value of Firm B?
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