You have assigned the following values to these three firms: Price Upcoming Dividend Growth Beta Estee Lauder $50.00 $1.70 16.50% 0.74 Kimco Realty 82.00 1.68 11.00 1.51 Nordstrom 10.00 0.60 13.00 1.02 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. (Do not round intermediate calculations and round your final answers to 2 decimal places.) CAPM Constant-Growth Model Estee Lauder required return ____.__% ____.__% Kimco Realty required return ____.__% ____.__% Nordstrom required return ____.__% ____.__%
You have assigned the following values to these three firms: Price Upcoming Dividend Growth Beta Estee Lauder $50.00 $1.70 16.50% 0.74 Kimco Realty 82.00 1.68 11.00 1.51 Nordstrom 10.00 0.60 13.00 1.02 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. (Do not round intermediate calculations and round your final answers to 2 decimal places.) CAPM Constant-Growth Model Estee Lauder required return ____.__% ____.__% Kimco Realty required return ____.__% ____.__% Nordstrom required return ____.__% ____.__%
Chapter14: Security Structures And Determining Enterprise Values
Section: Chapter Questions
Problem 1hM
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You have assigned the following values to these three firms:
Price | Upcoming Dividend | Growth | Beta | |
Estee Lauder | $50.00 | $1.70 | 16.50% | 0.74 |
Kimco Realty | 82.00 | 1.68 | 11.00 | 1.51 |
Nordstrom | 10.00 | 0.60 | 13.00 | 1.02 |
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
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