Cost of Equity of firm A =Risk Free rate+Beta*Market Risk
Premium =1.21%+1.45*5.44% =9.098%
Price of stock A =Dividend Next Year/(Cost of Equity-Growth)
=1.23*(1+4.29%)/(9.098%-4.29%) =26.6798460898502
The Value of firm A =Price of share*Number of shares
=26.6798460898502*257,000,000=6,856,720,445.09
Suppose the risk-free rate is 1.21% and an analyst assumes a market risk premium of 5.44%....
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