Question
Suppose the risk-free rate is 3.32% and an analyst assumes a market risk premium of 7.34%. Firm A just paid a dividend of $1.28 per
Suppose the risk-free rate is 3.32% and an analyst assumes a market risk premium of 7.34%. Firm A just paid a dividend of $1.28 per share. The analyst estimates the of Firm A to be 1.25 and estimates the dividend growth rate to be 4.30% forever. Firm A has 278.00 million shares outstanding. Firm B just paid a dividend of $1.90 per share. The analyst estimates the of Firm B to be 0.77 and believes that dividends will grow at 2.75% forever. Firm B has 194.00 million shares outstanding. What is the value of Firm B? Submit Answer format: Currency: Round to: 2 decimal places.
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