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You have assigned the following values to these three firms: Price Upcoming Dividend Growth Beta US Bancorp $ 115.50 $ 3.15 9.00 % 1.42 Praxair
You have assigned the following values to these three firms:
Price | Upcoming Dividend | Growth | Beta | ||||||||||||
US Bancorp | $ | 115.50 | $ | 3.15 | 9.00 | % | 1.42 | ||||||||
Praxair | 57.10 | 1.18 | 14.50 | 2.14 | |||||||||||
Eastman Kodak | 27.45 | 1.00 | 9.20 | 1.84 | |||||||||||
Assume that the market portfolio will earn 12.70 percent and the risk-free rate is 3.40 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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