Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Suppose the risk-free rate is 3.45% and an analyst assumes a market risk premium of 6.73%. Firm A just paid a dividend of $1.01 per
Suppose the risk-free rate is 3.45% and an analyst assumes a market risk premium of 6.73%. Firm A just paid a dividend of $1.01 per share. The analyst estimates the of Firm A to be 1.20 and estimates the dividend growth rate to be 4.85% forever. Firm A has 300.00 million shares outstanding. Firm B just paid a dividend of $1.64 per share. The analyst estimates the of Firm B to be 0.75 and believes that dividends will grow at 2.14% forever. Firm B has 181.00 million shares outstanding. What is the value of Firm B?
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