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You have assigned the following values to these three firms: Price Upcoming Dividend Growth Beta US Bancorp $ 49.15 $ 3.70 7.60 % 1.85 Praxair
You have assigned the following values to these three firms: |
Price | Upcoming Dividend | Growth | Beta | ||||||||||||
US Bancorp | $ | 49.15 | $ | 3.70 | 7.60 | % | 1.85 | ||||||||
Praxair | 53.45 | 1.57 | 15.00 | 2.46 | |||||||||||
Eastman Kodak | 14.85 | 1.00 | 7.50 | 0.94 | |||||||||||
Assume that the market portfolio will earn 10.60 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. Round your final answer to 2 decimal places.) |
CAPM | Constant-growth model | |
US Bancorp required return | % | % |
Praxair required return | % | % |
Eastman Kodak required return | % | % |
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