You have assigned the following values to these three firms: Upcoming Dividend $0.60 1.54 0.50 Estee Lauder Kimco Realty Nordstrom Price $47.40 52.10 5.25 Estee Lauder required return Kimco Realty required return Nordstrom required return Growth 11.7% 8.0 14.6 Assume that the market portfolio will earn 11 percent and the risk-free rate is 4 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 Beta 0.75 1.30 2.20 % % % Constant-Growth Model % % %
You have assigned the following values to these three firms: Upcoming Dividend $0.60 1.54 0.50 Estee Lauder Kimco Realty Nordstrom Price $47.40 52.10 5.25 Estee Lauder required return Kimco Realty required return Nordstrom required return Growth 11.7% 8.0 14.6 Assume that the market portfolio will earn 11 percent and the risk-free rate is 4 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 Beta 0.75 1.30 2.20 % % % Constant-Growth Model % % %
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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You have assigned the following values to these three firms:
Upcoming
Dividend Growth
$0.60
1.54
0.50
Estee Lauder
Kimco Realty
Nordstrom
Price
$47.40
52.10
5.25
Estee Lauder required return
Kimco Realty required return
Nordstrom required return
Assume that the market portfolio will earn 11 percent and the risk-free rate is 4 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
11.7%
8.0
14.6
%
%
%
Beta
0.75
1.30
2.20
Constant-Growth
Model
%
%
%
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