Question: Suppose the risk - free rate is 2 . 9 4 % and an analyst assumes a market risk premium of 5 . 5 2
Suppose the riskfree rate is and an analyst assumes a market risk premium of Firm A just paid a dividend of $ per share. The analyst estimates the beta of Firm A to be and estimates the dividend growth rate to be forever. Firm A has million shares outstanding. Firm B just paid a dividend of $ per share. The analyst estimates the beta of Firm B to be and believes that dividends will grow at forever. Firm B has million shares outstanding. What is the value of Firm A
PLease use BA Calculator not excel to do this one
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