Question
In: Finance
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 grow at 2.64% forever. Firm B has 185.00 million shares outstanding. What is the value of Firm A?
Answer format: Currency: Round to: 2 decimal places.
Suppose the risk-free rate is 2.12% and an analyst assumes a market risk premium of 5.65%. Firm A just paid a dividend of $1.14 per share. The analyst estimates the β of Firm A to be 1.49 and estimates the dividend growth rate to be 4.08% forever. Firm A has 295.00 million shares outstanding. Firm B just paid a dividend of $1.76 per share. The analyst estimates the β of Firm B to be 0.81 and believes that dividends will grow at 2.88% forever. Firm B has 196.00 million shares outstanding. What is the value of Firm B?
Answer format: Currency: Round to: 2 decimal places.
Could really use the help! Thanks!
Solutions
jeff jeffy answered 1 year agoRelated Solutions
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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
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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
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1.Suppose the risk-free rate is 3.72% and an analyst assumes a market risk premium of 7.99%....
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Suppose the market premium is 9%, market volatility is 30% and the risk-free rate is 3%.
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investments such as
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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).
Stock X and Y have the following parameters.
X
Y
Beta (β)
0.6
1.2
Beginning Value
K20
K10
Dividend Value
K2
K1
End Value
K21
K10
Calculate the returns according to the Capital Asset Pricing
Model (CAPM) utilising the market return you plotted in part
A.
Calculate the returns according to the values...
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