Question
Suppose the risk-free rate is 3.92% and an analyst assumes a market risk premium of 7.30%. Firm A just paid a dividend of $1.05 per
Suppose the risk-free rate is 3.92% and an analyst assumes a market risk premium of 7.30%. Firm A just paid a dividend of $1.05 per share. The analyst estimates the of Firm A to be 1.28 and estimates the dividend growth rate to be 4.72% forever. Firm A has 260.00 million shares outstanding. Firm B just paid a dividend of $1.99 per share. The analyst estimates the of Firm B to be 0.76 and believes that dividends will grow at 2.16% forever. Firm B has 185.00 million shares outstanding. What is the value of Firm B?
Answer format: Currency: Round to: 2 decimal places.
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