Question: 10-29 Required Return Using the information in the table, compute the required return for each company using both CAPM and the constant-growth model. Compare and

10-29 Required Return Using the information in the table, compute the required return for each company using both CAPM and the constant-growth model. Compare and discuss the results. Assume that the market portfolio will earn 12 percent and the risk-free rate is 3.5 percent. (LG10-3, LG10-7) US Bancorp Praxair Eastman Kodak Price $36.55 64.75 24.95 Upcoming Dividend $1.60 1.12 1.00 Growth 10.0% 11.0 4.5 Beta 1.8 2.4 0.5

-29 Required Return Using the information in the table, compute the required return for each company using both CAPM and the constant-growth model. Compare and discuss the results. Assume that the market portfolio will earn 12 percent and the risk-free rate is 3.5 percent. (LG10-3, LG10-7)

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