You have assigned the following values to these three firms: Upcoming Price Dividend Growth Beta US...

Transcribed Image Text:

You have assigned the following values to these three firms: Upcoming Price Dividend Growth Beta US Bancorp $44.25 $2.65 7.40% 1.88 Praxair 77.50 1.89 20.50 2.70 Eastman Kodak 40.95 2.00 6.50 2.24 Assume that the market portfolio will earn 11.40 percent and the risk-free rate is 4.00 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.) CAPM Constant-Growth Model US Bancorp required return Praxair required return % % % % Eastman Kodak required return % % You have assigned the following values to these three firms: Upcoming Price Dividend Growth Beta US Bancorp $44.25 $2.65 7.40% 1.88 Praxair 77.50 1.89 20.50 2.70 Eastman Kodak 40.95 2.00 6.50 2.24 Assume that the market portfolio will earn 11.40 percent and the risk-free rate is 4.00 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.) CAPM Constant-Growth Model US Bancorp required return Praxair required return % % % % Eastman Kodak required return % %