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Can you help? Eaton Electronic Company's treasurer uses both the capital asset pricing model and the dividend valuation model to compute the cost of common
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Eaton Electronic Company's treasurer uses both the capital asset pricing model and the dividend valuation model to compute the cost of common equity {also referred to as the required rate of return for common equity}. Assume: Rf = 3% Km = 6% l3 = 1. 1 D1 = so. 56 P9 = 5 15 g = 5% a. Compute K1- {required rate of retum on common equity based on the capital asset pricing model]. {Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) m- b. Compute KB (required rate of return on common equity based on the dividend valuation model]. {Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)Step by Step Solution
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