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You have assigned the following values to these three firms: Price Upcoming Dividend Growth Beta US Bancorp $ 54.65 $ 2.95 9.40 % 1.68 Praxair
You have assigned the following values to these three firms: |
Price | Upcoming Dividend | Growth | Beta | ||||||||||||
US Bancorp | $ | 54.65 | $ | 2.95 | 9.40 | % | 1.68 | ||||||||
Praxair | 67.90 | 1.71 | 11.50 | 2.43 | |||||||||||
Eastman Kodak | 32.60 | 1.00 | 14.50 | 1.17 | |||||||||||
Assume that the market portfolio will earn 12.90 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. (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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