Really need help, 2 decimal places
"Suppose the risk-free rate is 3.00% and an analyst assumes a market risk premium of 5.84%. Firm A just paid a dividend of $1.36 per share. The analyst estimates the β of Firm A to be 1.38 and estimates the dividend growth rate to be 4.14% forever. Firm A has 262.00 million shares outstanding. Firm B just paid a dividend of $1.75 per share. The analyst estimates the β of Firm B to be 0.79 and believes that dividends will grow at 2.61% forever. Firm B has 191.00 million shares outstanding. What is the value of Firm A?"
r or cost of equity of Firm A=3.00%+1.38*5.84%=11.06%
What is the value of Firm A
=price of share A*shares
=((1.36*(1+4.14%))/(11.06%-4.14%))*262.00
=5362.31 million
the above is answer..
Really need help, 2 decimal places "Suppose the risk-free rate is 3.00% and an analyst assumes...
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