You have assigned the following values to these three firms: 1 2 AENT 3 4 Ester Lauder Kimbo Realty Nordstream Ester Lauder Kimbo Realty Nordstream B Expected Dividend D Growth Current Price Estimate 16.50% 11.00% $ 1.70 $50.00 $ 1.68 $ 82.00 $ 0.60 $ 10.00 13.00% Assume that the market portfolio will earn 15.50 percent and the risk-free rate is 6.40 percent. Compute the required return for each company using both CAPM and the constant-growth model. Note: Do not round intermediate calculations and round your final answers to 2 decimal places. Required return - Required return - CGM CAPM % % % E % % % Beta 0.74 1.51 1.02
You have assigned the following values to these three firms: 1 2 AENT 3 4 Ester Lauder Kimbo Realty Nordstream Ester Lauder Kimbo Realty Nordstream B Expected Dividend D Growth Current Price Estimate 16.50% 11.00% $ 1.70 $50.00 $ 1.68 $ 82.00 $ 0.60 $ 10.00 13.00% Assume that the market portfolio will earn 15.50 percent and the risk-free rate is 6.40 percent. Compute the required return for each company using both CAPM and the constant-growth model. Note: Do not round intermediate calculations and round your final answers to 2 decimal places. Required return - Required return - CGM CAPM % % % E % % % Beta 0.74 1.51 1.02
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 20P
Related questions
Question
![You have assigned the following values to these three firms:
1
2
3
4
A
Ester Lauder
Kimbo Realty
Nordstream
Ester Lauder
Kimbo Realty
Nordstream
B
D
Expected Current
Dividend Price
$ 1.70 $50.00
Growth
Estimate
16.50%
$ 1.68 $ 82.00 11.00%
$ 0.60 $10.00 13.00%
Assume that the market portfolio will earn 15.50 percent and the risk-free rate is 6.40 percent. Compute the required return for each
company using both CAPM and the constant-growth model.
Note: Do not round intermediate calculations and round your final answers to 2 decimal places.
Required return - Required return
CGM
CAPM
%
%
%
E
%
%
%
Beta
0.74
1.51
1.02](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb387c7b0-ef79-4c5a-bd31-00e75b8f1cc2%2F751e1d6e-1721-4a2e-93ef-b46b7e9fc927%2Fsqygqv6_processed.png&w=3840&q=75)
Transcribed Image Text:You have assigned the following values to these three firms:
1
2
3
4
A
Ester Lauder
Kimbo Realty
Nordstream
Ester Lauder
Kimbo Realty
Nordstream
B
D
Expected Current
Dividend Price
$ 1.70 $50.00
Growth
Estimate
16.50%
$ 1.68 $ 82.00 11.00%
$ 0.60 $10.00 13.00%
Assume that the market portfolio will earn 15.50 percent and the risk-free rate is 6.40 percent. Compute the required return for each
company using both CAPM and the constant-growth model.
Note: Do not round intermediate calculations and round your final answers to 2 decimal places.
Required return - Required return
CGM
CAPM
%
%
%
E
%
%
%
Beta
0.74
1.51
1.02
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