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You have assigned the following values to these two firms: Price Upcoming Dividend Growth Beta Estee Lauder $ 46.00 $ 1.60 15.00 % 0.76 Kimco
You have assigned the following values to these two firms:
Price | Upcoming Dividend | Growth | Beta | ||||||||||||
Estee Lauder | $ | 46.00 | $ | 1.60 | 15.00 | % | 0.76 | ||||||||
Kimco Realty | 55.00 | 1.77 | 15.00 | 1.67 |
Assume that the market portfolio will earn 10.60 percent and the risk-free rate is 3.60 percent. Compute the required return for each company using the CAPM and the expected return using the constant-growth model.
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