Question
Suppose the risk-free rate is 3.77% and an analyst assumes a market risk premium of 7.39%. Firm A just paid a dividend of $1.22 per
Suppose the risk-free rate is 3.77% and an analyst assumes a market risk premium of 7.39%. Firm A just paid a dividend of $1.22 per share. The analyst estimates the of Firm A to be 1.21 and estimates the dividend growth rate to be 4.97% forever. Firm A has 279.00 million shares outstanding. Firm B just paid a dividend of $1.72 per share. The analyst estimates the of Firm B to be 0.82 and believes that dividends will grow at 2.27% forever. Firm B has 194.00 million shares outstanding. What is the value of Firm A?
Answer format: Currency: Round to: 3 decimal places.
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