Question
In: Finance
1.Suppose the risk-free rate is 3.72% and an analyst assumes a market risk premium of 7.99%....
1.Suppose the risk-free rate is 3.72% and an analyst assumes a market risk premium of 7.99%. Firm A just paid a dividend of $1.11 per share. The analyst estimates the β of Firm A to be 1.47 and estimates the dividend growth rate to be 4.95% forever. Firm A has 269.00 million shares outstanding. Firm B just paid a dividend of $1.98 per share. The analyst estimates the β of Firm B to be 0.84 and believes that dividends will grow at 2.07% forever. Firm B has 182.00 million shares outstanding. What is the value of Firm B?
2.Suppose the risk-free rate is 2.78% and an analyst assumes a market risk premium of 5.12%. Firm A just paid a dividend of $1.46 per share. The analyst estimates the β of Firm A to be 1.32 and estimates the dividend growth rate to be 4.24% forever. Firm A has 263.00 million shares outstanding. Firm B just paid a dividend of $1.63 per share. The analyst estimates the β of Firm B to be 0.77 and believes that dividends will grow at 2.99% forever. Firm B has 189.00 million shares outstanding. What is the value of Firm A?
Solutions
jeff jeffy answered 1 year agoRelated Solutions
1. Suppose the risk-free rate is 2.64% and an analyst assumes a market risk premium of...
1. Suppose the risk-free rate is 2.64% and an analyst assumes a
market risk premium of 6.89%. Firm A just paid a dividend of $1.25
per share. The analyst estimates the β of Firm A to be 1.41 and
estimates the dividend growth rate to be 4.64% forever. Firm A has
276.00 million shares outstanding. Firm B just paid a dividend of
$1.53 per share. The analyst estimates the β of Firm B to be 0.85
and believes that dividends...
1. A) Suppose the risk-free rate is 3.00% and an analyst assumes a market risk premium...
1. A) Suppose the risk-free rate is 3.00% and an analyst assumes
a market risk premium of 7.64%. Firm A just paid a dividend of
$1.03 per share. The analyst estimates the β of Firm A to be 1.33
and estimates the dividend growth rate to be 4.74% forever. Firm A
has 262.00 million shares outstanding. Firm B just paid a dividend
of $1.61 per share. The analyst estimates the β of Firm B to be
0.87 and believes that...
Suppose the risk-free rate is 1.24% and an analyst assumes a market risk premium of 6.69%....
Suppose the risk-free rate is 1.24% and an analyst assumes a
market risk premium of 6.69%. Firm A just paid a dividend of $1.31
per share. The analyst estimates the β of Firm A to be 1.40 and
estimates the dividend growth rate to be 4.85% forever. Firm A has
261.00 million shares outstanding. Firm B just paid a dividend of
$1.67 per share. The analyst estimates the β of Firm B to be 0.80
and believes that dividends will...
Suppose the risk-free rate is 1.46% and an analyst assumes a market risk premium of 6.80%....
Suppose the risk-free rate is 1.46% and an analyst assumes a
market risk premium of 6.80%. Firm A just paid a dividend of $1.23
per share. The analyst estimates the β of Firm A to be 1.26 and
estimates the dividend growth rate to be 4.95% forever. Firm A has
260.00 million shares outstanding. Firm B just paid a dividend of
$1.99 per share. The analyst estimates the β of Firm B to be 0.83
and believes that dividends will...
Suppose the risk-free rate is 1.88% and an analyst assumes a market risk premium of 7.11%....
Suppose the risk-free rate is 1.88% and an analyst assumes a
market risk premium of 7.11%. Firm A just paid a dividend of $1.45
per share. The analyst estimates the β of Firm A to be 1.21 and
estimates the dividend growth rate to be 4.11% forever. Firm A has
277.00 million shares outstanding. Firm B just paid a dividend of
$1.62 per share. The analyst estimates the β of Firm B to be 0.87
and believes that dividends will...
Suppose the risk-free rate is 1.88% and an analyst assumes a market risk premium of 7.11%....
Suppose the risk-free rate is 1.88% and an analyst assumes a
market risk premium of 7.11%. Firm A just paid a dividend of $1.45
per share. The analyst estimates the β of Firm A to be 1.21 and
estimates the dividend growth rate to be 4.11% forever. Firm A has
277.00 million shares outstanding. Firm B just paid a dividend of
$1.62 per share. The analyst estimates the β of Firm B to be 0.87
and believes that dividends will...
Suppose the risk-free rate is 1.60% and an analyst assumes a market risk premium of 5.61%....
Suppose the risk-free rate is 1.60% and an analyst assumes a
market risk premium of 5.61%. Firm A just paid a dividend of $1.14
per share. The analyst estimates the β of Firm A to be 1.39 and
estimates the dividend growth rate to be 4.86% forever. Firm A has
256.00 million shares outstanding. Firm B just paid a dividend of
$1.81 per share. The analyst estimates the β of Firm B to be 0.78
and believes that dividends will...
Suppose the risk-free rate is 2.78% and an analyst assumes a market risk premium of 6.68%....
Suppose the risk-free rate is 2.78% and an analyst assumes a
market risk premium of 6.68%. Firm A just paid a dividend of $1.24
per share. The analyst estimates the β of Firm A to be 1.49 and
estimates the dividend growth rate to be 4.71% forever. Firm A has
272.00 million shares outstanding. Firm B just paid a dividend of
$1.74 per share. The analyst estimates the β of Firm B to be 0.89
and believes that dividends will...
1. The risk free rate is 2%, the risk premium for the market is 5%, and...
1. The risk free rate is 2%, the risk premium for the market is
5%, and a stock has an expected return of 10.5%. What is the firm’s
beta?
2. A firm has a beta of 1.3 and the risk premium for the market
is 6%. If the firms expected return is 11%, what is the risk free
rate?
3. A firm with a beta of 1.5 has a market return of 15% when the
risk free rate is 3%...
Suppose the market premium is 9%, market volatility is 30% and the risk-free rate is 3%.
Suppose the market premium is 9%, market volatility is 30% and
the risk-free rate is 3%.Draw the Security Market Line (SML). Discuss four (4) risks regarding alternative
investments such as
cryptocurrencies. Empirically analyse the insurance sector of Zambia, and
wherepossible,...
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