You have assigned the following values to these three firms: Upcoming Dividend Estee Lauder Kinco Realty...
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You have assigned the following values to these three firms: Upcoming Dividend Estee Lauder Kinco Realty Nordstrom Price $33.00 70.00 9.50 $0.70 1.21 2.00 Growth 10.50% 15.00 5.00 Beta 0.69 1.56 0.99 Assume that the market portfolio will earn 15.90 percent and the risk-free rate is 4.90 percent. Compute the required return for each company using both CAPM and the constant-growth model. (Do not round intermediate calculations and round your final answers to 2 decimal places.) You have assigned the following values to these three firms: Upcoming Dividend Estee Lauder Kinco Realty Nordstrom Price $33.00 70.00 9.50 $0.70 1.21 2.00 Growth 10.50% 15.00 5.00 Beta 0.69 1.56 0.99 Assume that the market portfolio will earn 15.90 percent and the risk-free rate is 4.90 percent. Compute the required return for each company using both CAPM and the constant-growth model. (Do not round intermediate calculations and round your final answers to 2 decimal places.)
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Answer rating: 100% (QA)
The formula to calculate the required value using the CAPM model is given below Expected returnRfBetaRmRf Calculate the required return for EL firm us... View the full answer
Related Book For
Understanding Basic Statistics
ISBN: 9781111827021
6th Edition
Authors: Charles Henry Brase, Corrinne Pellillo Brase
Posted Date:
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