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You have assigned the following values to these three firms: Price Upcoming Dividend Growth Beta US Bancorp $ 55.95 $ 3.95 8.20 % 1.52 Praxair
You have assigned the following values to these three firms: |
Price | Upcoming Dividend | Growth | Beta | ||||||||||||
US Bancorp | $ | 55.95 | $ | 3.95 | 8.20 | % | 1.52 | ||||||||
Praxair | 49.30 | 1.10 | 13.50 | 1.73 | |||||||||||
Eastman Kodak | 16.70 | 2.00 | 13.20 | 1.03 | |||||||||||
Assume that the market portfolio will earn 11.40 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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