Suppose the risk-free rate is 2.48% and an analyst assumes a market risk premium of 6.44%. Firm A just paid a dividend of $1.17 per share. The analyst estimates the of Firm A to be 1.37 and estimates the dividend growth rate to be 4.37% forever. Firm A has 274.00 million shares outstanding. Firm B just paid a dividend of $1.67 per share. The analyst estimates the of Firm B to be 0.87 and believes that dividends will grow at 2.51% forever. Firm B has 185.00 million shares outstanding. What is the value of Firm B?

Answer rating: 100% (QA)

To calculate the value of Firm B we can use the dividend discount model DDM f... View the full answer