# 29 Suppose the risk-free rate is 2.12% and an analyst assumes a market risk premium of 5.18%. Firm A just paid a dividend of $1.09 per share. The analyst estimates the B of Firm A to be 1.48 and estimates the dividend growth rate to be 4.49% forever. Firm A has 262.00 million shares outstanding. Firm B just paid a dividend of $1.82 per share. The analyst estimates the B of Firm B to be 0.72 and believes that dividends will grow at 2.61% forever. Firm B has 182.00 million shares outstanding. What is the value of Firm A? Submit Answer format: Currency: Round to: 2 decimal places.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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#29
Suppose the risk-free rate is 2.12% and an analyst
assumes a market risk premium of 5.18%. Firm A just
paid a dividend of $1.09 per share. The analyst
estimates the B of Firm A to be 1.48 and estimates the
dividend growth rate to be 4.49% forever. Firm A has
262.00 million shares outstanding. Firm B just paid a
dividend of $1.82 per share. The analyst estimates the B
of Firm B to be 0.72 and believes that dividends will
grow at 2.61% forever. Firm B has 182.00 million shares
outstanding. What is the value of Firm A?
Submit
Answer format: Currency: Round to: 2 decimal places.
unanswered
not_submitted
Attempts Remaining: Infinity
Transcribed Image Text:#29 Suppose the risk-free rate is 2.12% and an analyst assumes a market risk premium of 5.18%. Firm A just paid a dividend of $1.09 per share. The analyst estimates the B of Firm A to be 1.48 and estimates the dividend growth rate to be 4.49% forever. Firm A has 262.00 million shares outstanding. Firm B just paid a dividend of $1.82 per share. The analyst estimates the B of Firm B to be 0.72 and believes that dividends will grow at 2.61% forever. Firm B has 182.00 million shares outstanding. What is the value of Firm A? Submit Answer format: Currency: Round to: 2 decimal places. unanswered not_submitted Attempts Remaining: Infinity
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