You have assigned the following values to these three firms: Upcoming Dividend US Bancorp Praxair Eastman...
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You have assigned the following values to these three firms: Upcoming Dividend US Bancorp Praxair Eastman Kodak Price $ 29.80 59.15 36.50 $ 3.20 1.51 1.00 US Bancorp required return Praxair required return Eastman Kodak required return CAPM Growth 8.80% % % % 13.00 11.50 Assume that the market portfolio will earn 15.50 percent and the risk-free rate is 5.70 percent. Compute the required return for each company using both CAPM and the constant-growth model. Note: Do not round intermediate calculations and round your final answers to 2 decimal places. Beta 1.59 2.20 0.98 Constant-Growth Model % % You have assigned the following values to these three firms: Upcoming Dividend US Bancorp Praxair Eastman Kodak Price $ 29.80 59.15 36.50 $ 3.20 1.51 1.00 US Bancorp required return Praxair required return Eastman Kodak required return CAPM Growth 8.80% % % % 13.00 11.50 Assume that the market portfolio will earn 15.50 percent and the risk-free rate is 5.70 percent. Compute the required return for each company using both CAPM and the constant-growth model. Note: Do not round intermediate calculations and round your final answers to 2 decimal places. Beta 1.59 2.20 0.98 Constant-Growth Model % %
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To calculate the required return for each company using both the Capital Asset Pricing Model CAPM an... View the full answer
Related Book For
Finance Applications and Theory
ISBN: 978-0077861681
3rd edition
Authors: Marcia Cornett, Troy Adair
Posted Date:
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