First one is example how the answer should look like Please help me with the second problem thank you #5Suppose the risk-free rate is 1.87% and an analystassumes a market risk premium of 6.80%. Firm A justpaid a dividend of $1.06 per share. The analystestimates the B of Firm A to be 1.21 and estimates thedividend growth rate to be 4.05% forever. Firm A has277.00 million shares outstanding. Firm B just paid adividend of $1.70 per share. The analyst estimates the Bof Firm B to be 0.77 and believes that dividends willgrow at 2.95% forever. Firm B has 194.00 million sharesoutstanding. What is the value of Firm B?8169.61SubmitAnswer format: Currency: Round to: 2 decimal places.Show HintreattemptedincorrectCorrect Answer: $8,169,612,608.28Points: 0More DetailsAttempts Remaining: Infinity#5 OSuppose the risk-free rate is 3.65% and an analystassumes a market risk premium of 7.45%. Firm A justpaid a dividend of $1.44 per share. The analystestimates the ß of Firm A to be 1.30 and estimates thedividend growth rate to be 4.34% forever. Firm A has261.00 million shares outstanding. Firm B just paid adividend of $1.71 per share. The analyst estimates the Bof Firm B to be 0.83 and believes that dividends willgrow at 2.92% forever. Firm B has 182.00 million sharesoutstanding. What is the value of Firm B?SubmitAnswer format: Currency: Round to: 2 decimal places.unanswerednot_submittedAttempts Remaining: Infinity

Cost of equity = Risk-free rate + Beta * Market risk premium

Suppose the risk-free rate is 3.65% and an analyst assumes a market risk premium of 7.45%. Firm A just paid a dividend of $1.44 per share. The analyst estimates the B of Firm A to be 1.30 and estimates the dividend growth rate to be 4.34% forever. Firm A has 261.00 million shares outstanding. Firm B just paid a dividend of $1.71 per share. The analyst estimates the ß of Firm B to be 0.83 and believes that dividends will grow at 2.92% forever. Firm B has 182.00 million shares outstanding. What is the value of Firm B? Submit Answer format: Currency: Round to: 2 decimal places.

Suppose the risk-free rate is 3.65% and an analyst assumes a market risk premium of 7.45%. Firm A just paid a dividend of $1.44 per share. The analyst estimates the B of Firm A to be 1.30 and estimates the dividend growth rate to be 4.34% forever. Firm A has 261.00 million shares outstanding. Firm B just paid a dividend of $1.71 per share. The analyst estimates the ß of Firm B to be 0.83 and believes that dividends will grow at 2.92% forever. Firm B has 182.00 million shares outstanding. What is the value of Firm B? Submit Answer format: Currency: Round to: 2 decimal places.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter12: The Cost Of Capital

Section: Chapter Questions

Problem 19P

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Q. 1 £4.50, was held for a year and then sold for £6.20, and which paid a dividend at the end of the holding period of 20p? Q. 2 The risk-free return is 11 per cent, Company J has a beta of 1.8 and an expected return of 21 per cent. Calculate the risk premium for the market index over the risk-free rate assuming J is on the security market line. What is the holding- period return for a share which cost Q. 3 What is Probability Analysis?