Bhupatbhai You have assigned the following values to these three firms:UpcomingPriceDividend GrowthBetaUS Bancorp$41.50$2.559.80%1.76Praxair78.801.2816.502.83Eastman Kodak34.552.009.501.18Assume that the market portfolio will earn 12.40 percent and the risk-free rate is 4.80 percent.Compute the required return for each company using both CAPM and the constant-growth model. (Do not round intermediatecalculations and round your final answers to 2 decimal places.)US Bancorp required returnPraxair required returnEastman Kodak required returnCAPMConstant-GrowthModel%%%%%%

The Constant Growth Model (also known as the Gordon Growth Model or Dividend Discount Model) and the…

Answered: You have assigned the following values…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 26P

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You have assigned the following values to these three firms: Upcoming Price Dividend Growth Beta US Bancorp $44.25 $2.65 7.40% 1.88 Praxair 77.50 1.89 20.50 2.70 Eastman Kodak 40.95 2.00 6.50 2.24 Assume that the market portfolio will earn 11.40 percent and the risk-free rate is 4.00 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 US Bancorp required return Praxair required return % % % % Eastman Kodak required return % %
You have assigned the following values to these three firms: Price Upcoming Dividend Growth Beta US Bancorp $ 51.35 $ 2.25 7.00 % 1.78 Praxair 41.60 1.55 20.50 1.96 Eastman Kodak 43.15 2.00 8.40 0.84 Assume that the market portfolio will earn 11.00 percent and the risk-free rate is 4.00 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 US Bancorp required return % % Praxair required return % % Eastman Kodak required return % %
You have assigned the following values to these three firms: Upcoming Dividend $0.50 Estee Lauder Kimco Realty Nordstrom Price $36.00 75.00 11.00 1.58 2.00 Estee Lauder required return Kimco Realty required return Nordstrom required return Assume that the market portfolio will earn 17.20 percent and the risk-free rate is 8.20 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 Growth 11.40% 17.00 8.80 % % % Beta 0.92 1.28 1.24 Constant-Growth Model % % %
mni.3
You have assigned the following values to these three firms: Upcoming Dividend US Bancorp Praxair Eastman Kodak Price $ 29.80 59.15 36.50 $ 3.20 1.51 1.00 US Bancorp required return Praxair required return Eastman Kodak required return CAPM Growth 8.80% Assume that the market portfolio will earn 15.50 percent and the risk-free rate is 5.70 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. % % % 13.00 11.50 Beta 1.59 2.20 0.98 Constant-Growth Model % % %
You have assigned the following values to these three firms: Upcoming Dividend $3.15 US Bancorp Praxair Eastman Kodak 2 Price $115.50 57.10 27.45 US Bancorp required return Praxair required return Eastman Kodak required return 1.18 1.00 CAPM % % Growth 9.00% Assume that the market portfolio will earn 12.70 percent and the risk-free rate is 3.40 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.) % 14.50 9.20 Beta 1.42 2.14 1.84 Constant-Growth Model % % %
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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
Assume that you are a consultant to Thornton Inc., and you have been provided with the following data: risk 1.8. What is the cost of equity from free rate rRF = 5.5%; market risk premium RPM retained earnings based on the CAPM approach? = 6.0%; and b =
Consider the following information for Vine Inc.: Beta: 1.39 Risk-free rate: 7% Market Risk Premium: 11% What is the cost of the common equity of Vine Inc.? 22.29% 19.21% 32.02%
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