Question
Suppose the risk-free rate is 3.15% and an analyst assumes a market risk premium of 7.29%. Firm A just paid a dividend of $1.04 per
Suppose the risk-free rate is 3.15% and an analyst assumes a market risk premium of 7.29%. Firm A just paid a dividend of $1.04 per share. The analyst estimates the of Firm A to be 1.39 and estimates the dividend growth rate to be 4.20% forever. Firm A has 260.00 million shares outstanding. Firm B just paid a dividend of $1.97 per share. The analyst estimates the of Firm B to be 0.89 and believes that dividends will grow at 2.96% forever. Firm B has 194.00 million shares outstanding. What is the value of Firm A?
Answer format: Currency: Round to: 2 decimal places
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started