Question: You have assigned the following values to these three firms: Price Upcoming Dividend Growth Beta US Bancorp $ 36.55 $ 1.60 10.00 % 1.80 Praxair
| You have assigned the following values to these three firms: |
| Price | Upcoming Dividend | Growth | Beta | ||||||||||||
| US Bancorp | $ | 36.55 | $ | 1.60 | 10.00 | % | 1.80 | ||||||||
| Praxair | 64.75 | 1.12 | 11.00 | 2.40 | |||||||||||
| Eastman Kodak | 24.95 | 1.00 | 4.50 | 0.50 |
| Assume that the market portfolio will earn 12.00 percent and the risk-free rate is 3.50 percent. |
| Compute the required return for each company using both CAPM and the constant-growth model.(Do not round intermediate calculations. Round your final answer to 2 decimal places.) |
| CAPM | Constant-growth model | |
| US Bancorp required return | % | % |
| Praxair required return | % | % |
| Eastman Kodak required return | % |
|
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