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You have assigned the following values to these three firms: Price Upcoming Dividend Growth Beta US Bancorp $ 29.50 $ 2.60 6.40 % 1.83 Praxair
You have assigned the following values to these three firms:
Price | Upcoming Dividend | Growth | Beta | ||||||||||||
US Bancorp | $ | 29.50 | $ | 2.60 | 6.40 | % | 1.83 | ||||||||
Praxair | 66.75 | 1.48 | 14.00 | 1.62 | |||||||||||
Eastman Kodak | 44.30 | 1.00 | 5.80 | 0.85 | |||||||||||
Assume that the market portfolio will earn 11.20 percent and the risk-free rate is 3.00 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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