Suppose the risk-free rate is 3.00% and an analyst assumes a market risk premium of...
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Suppose the risk-free rate is 3.00% and an analyst assumes a market risk premium of 5.50%. Firm A just paid a dividend of $1.80 per share. The analyst estimates the beta of Firm A to be 1.22 and estimates the dividend growth rate to be 4.36% forever. Firm A has 251.00 million shares of stock outstanding. Firm B just paid a dividend of $1.87 per share. The analyst estimates the beta of Firm B to be 0.70 and believes that dividends will grow at 3.00% forever. Firm B has 181.00 million shares of stock outstanding. The value of Firm A is $_____ O 1) 12,362,603,956.04 O2) 10,635,503,296.70 3) 8,813,055,700.93 O 4) 11,354,821,674.31 5) 9,658.219,377.21
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