Question
Suppose the risk-free rate is 3.76% and an analyst assumes a market risk premium of 5.12%. Firm A just paid a dividend of $1.16 per
Suppose the risk-free rate is 3.76% and an analyst assumes a market risk premium of 5.12%. Firm A just paid a dividend of $1.16 per share. The analyst estimates the of Firm A to be 1.22 and estimates the dividend growth rate to be 4.16% forever. Firm A has 293.00 million shares outstanding. Firm B just paid a dividend of $1.58 per share. The analyst estimates the of Firm B to be 0.73 and believes that dividends will grow at 2.86% forever. Firm B has 182.00 million shares outstanding. What is the value of Firm A?
Suppose the risk-free rate is 1.71% and an analyst assumes a market risk premium of 7.14%. Firm A just paid a dividend of $1.13 per share. The analyst estimates the of Firm A to be 1.41 and estimates the dividend growth rate to be 4.43% forever. Firm A has 298.00 million shares outstanding. Firm B just paid a dividend of $1.59 per share. The analyst estimates the of Firm B to be 0.87 and believes that dividends will grow at 2.28% forever. Firm B has 182.00 million shares outstanding. What is the value of Firm B?
Please answer both as it goes for 1 question on assignment
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