FREE Trial
Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

URGENT Suppose the risk-free rate is 3.95% and an analyst assumes a market risk premium of 7.87%. Firm A just paid a dividend of $1.21

URGENT

image text in transcribed

Suppose the risk-free rate is 3.95% and an analyst assumes a market risk premium of 7.87%. Firm A just paid a dividend of $1.21 per share. The analyst estimates the of Firm A to be 1.24 and estimates the dividend growth rate to be 4.52% forever. Firm A has 278.00 million shares outstanding. Firm B just paid a dividend of $1.87 per share. The analyst estimates the of Firm B to be 0.89 and believes that dividends will grow at 2.49% forever. Firm B has 184.00 million shares outstanding. What is the value of Firm A

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Beyond Greed And Fear Understanding Behavioral Finance And The Psychology Of Investing

Beyond Greed And Fear Understanding Behavioral Finance And The Psychology Of Investing

Authors: Hersh Shefrin

1st Edition

0195161211, 978-0195161212

More Books

Students also viewed these Finance questions

Question

★★★★★
Refer to Practice 19-5. Make any necessary journal entry on the mining companys books on December 31 of Year 1 in connection with the copper futures contract, assuming that the price of copper per...

Answered: 1 week ago

Question

★★★★★
Please help with this question. Thank you!! A bag contains green and white marbles. The proportions of each color are 3/4 green and 1/4 white. We will draw a marble, record the color and then return...

Answered: 1 week ago

Question

★★★★★
What would a horizontal trend tell you about a firms performance?

Answered: 1 week ago

Question

★★★★★
Five kilograms of a 30 wt% acetone70% water mixture is added to 3.5 kg of a 20 wt% ace tone80% MIBK mixture at 25 C. Use Figure 6.6-1 to estimate the mass and composition of each phase of the...

Answered: 1 week ago

Question

★★★★★
URGENT Suppose the risk-free rate is 3.95% and an analyst assumes a market risk premium of 7.87%. Firm A just paid a dividend of $1.21 per share. The analyst estimates the of Firm A to be 1.24 and...

Answered: 1 week ago

Question

★★★★★
Below is a 2-3 tree. Below draw the 2.3tree that results from inserting 52. if you draw trees corresponding to intermediate steps, make sure you clearly mark which tree is your final answer 10 20

Answered: 1 week ago

Question

★★★★★
What is the Big Bang Theory?

Answered: 1 week ago

Question

★★★★★
Due Thursday Think about the kinds of diversity you have seen in your current team, past teams, or in your community. Respond to the following in a minimum of 175 words: Reflection: Look back at the...

Answered: 1 week ago

Question

★★★★★
Reporting Discontinued Operations On October 31, 2020, Leigh Corp. approved a formal plan to dispose of its Knit Products Division. On December 31, 2020, the Knit Products Division was held for sale...

Answered: 1 week ago

Question

★★★★★
We know the Pineapple Unadjusted Trial Balance 12/31/2020 Account Dr Balanc Cr. Balanc Cash 6,000 Accounts Receivable 20,000 Allowance for Doubtful Accounts 2,500 Supplies 5,000 Equipment 75,000...

Answered: 1 week ago

Question

★★★★★
The new intern is trying to understand the dividend policy of your firm. Having studied dividend policies at university, the intern wonders why the firm chose its dividend policy. The intern also...

Answered: 1 week ago

Previous Question Next Question