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Suppose the risk-free rate is 3.65% and an analyst assumes a market risk premium of 7.45%. Firm A just paid a dividend of $1.44 per share. The analyst estimates the B of Firm A to be 1.30 and estimates the dividend growth rate to be 4.34% forever. Firm A has 261.00 million shares outstanding. Firm B just paid a dividend of $1.71 per share. The analyst estimates the ß of Firm B to be 0.83 and believes that dividends will grow at 2.92% forever. Firm B has 182.00 million shares outstanding. What is the value of Firm B? Submit Answer format: Currency: Round to: 2 decimal places.

Suppose the risk-free rate is 3.65% and an analyst assumes a market risk premium of 7.45%. Firm A just paid a dividend of $1.44 per share. The analyst estimates the B of Firm A to be 1.30 and estimates the dividend growth rate to be 4.34% forever. Firm A has 261.00 million shares outstanding. Firm B just paid a dividend of $1.71 per share. The analyst estimates the ß of Firm B to be 0.83 and believes that dividends will grow at 2.92% forever. Firm B has 182.00 million shares outstanding. What is the value of Firm B? Submit Answer format: Currency: Round to: 2 decimal places.

Essentials Of Investments
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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#5 Suppose the risk-free rate is 1.87% and an analyst assumes a market risk premium of 6.80%. Firm A just paid a dividend of $1.06 per share. The analyst estimates the B of Firm A to be 1.21 and estimates the dividend growth rate to be 4.05% forever. Firm A has 277.00 million shares outstanding. Firm B just paid a dividend of $1.70 per share. The analyst estimates the B of Firm B to be 0.77 and believes that dividends will grow at 2.95% forever. Firm B has 194.00 million shares outstanding. What is the value of Firm B? 8169.61 Submit Answer format: Currency: Round to: 2 decimal places. Show Hint reattempted incorrect Correct Answer: $8,169,612,608.28 Points: 0 More Details Attempts Remaining: Infinity #5 O Suppose the risk-free rate is 3.65% and an analyst assumes a market risk premium of 7.45%. Firm A just paid a dividend of $1.44 per share. The analyst estimates the ß of Firm A to be 1.30 and estimates the dividend growth rate to be 4.34% forever. Firm A has 261.00 million shares outstanding. Firm B just paid a dividend of $1.71 per share. The analyst estimates the B of Firm B to be 0.83 and believes that dividends will grow at 2.92% forever. Firm B has 182.00 million shares outstanding. What is the value of Firm B? Submit Answer format: Currency: Round to: 2 decimal places. unanswered not_submitted Attempts Remaining: Infinity
Transcribed Image Text:#5 Suppose the risk-free rate is 1.87% and an analyst assumes a market risk premium of 6.80%. Firm A just paid a dividend of $1.06 per share. The analyst estimates the B of Firm A to be 1.21 and estimates the dividend growth rate to be 4.05% forever. Firm A has 277.00 million shares outstanding. Firm B just paid a dividend of $1.70 per share. The analyst estimates the B of Firm B to be 0.77 and believes that dividends will grow at 2.95% forever. Firm B has 194.00 million shares outstanding. What is the value of Firm B? 8169.61 Submit Answer format: Currency: Round to: 2 decimal places. Show Hint reattempted incorrect Correct Answer: $8,169,612,608.28 Points: 0 More Details Attempts Remaining: Infinity #5 O Suppose the risk-free rate is 3.65% and an analyst assumes a market risk premium of 7.45%. Firm A just paid a dividend of $1.44 per share. The analyst estimates the ß of Firm A to be 1.30 and estimates the dividend growth rate to be 4.34% forever. Firm A has 261.00 million shares outstanding. Firm B just paid a dividend of $1.71 per share. The analyst estimates the B of Firm B to be 0.83 and believes that dividends will grow at 2.92% forever. Firm B has 182.00 million shares outstanding. What is the value of Firm B? Submit Answer format: Currency: Round to: 2 decimal places. unanswered not_submitted Attempts Remaining: Infinity
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