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you have assigned the following values to these three firms: Price Upcoming Dividend Growth Beta US Bancorp $ 47.10 $ 3.55 7.80 % 1.83 Praxair
you have assigned the following values to these three firms: |
Price | Upcoming Dividend | Growth | Beta | ||||||||||||
US Bancorp | $ | 47.10 | $ | 3.55 | 7.80 | % | 1.83 | ||||||||
Praxair | 48.40 | 1.79 | 15.50 | 1.18 | |||||||||||
Eastman Kodak | 19.80 | 2.00 | 10.40 | 2.14 | |||||||||||
Assume that the market portfolio will earn 13.80 percent and the risk-free rate is 6.00 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 | % | % |
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