Question
Select one of the following companies Cardinal Health (CAH), . Please use the same firm you used for the bonds. Look up the information on
Select one of the following companies Cardinal Health (CAH), . Please use the same firm you used for the bonds. Look up the information on their equity (www.finra.org). Please provide the following: share price, market capitalization, annual dividend, annual earnings per share (basic), return on equity and beta. Note: You can select a different firm with instructor approval.
a. Assume a long-term growth rate of 5%. Find the required return using the dividend discount model.
b. Risk: Assume a market risk premium of 6%. Use the 10-year Treasury bond yield as the risk-free rate. Use the capital asset pricing model to estimate the required return on the equity.
Share Price | Market Capitalization | Annual Dividend | Annual Earnings per Share (basic) | Return on Equity (5-year) | Return on Equity (TTM) | Beta (5-year) |
$94.10 | 23.9579 Bil | 1.98 | -3.35 | -14.10 | 172.46 | 0.78 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started