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You have assigned the following values to these three firms: Upcoming Price Dividend Growth Beta US Bancorp $41.50 $2.55 9.80% 1.76 Praxair 78.80 1.28 16.50 2.83 Eastman Kodak 34.55 2.00 9.50 1.18 Assume 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 intermediate calculations and round your final answers to 2 decimal places.) US Bancorp required return Praxair required return Eastman Kodak required return CAPM Constant-Growth Model % % % % % %

You have assigned the following values to these three firms: Upcoming Price Dividend Growth Beta US Bancorp $41.50 $2.55 9.80% 1.76 Praxair 78.80 1.28 16.50 2.83 Eastman Kodak 34.55 2.00 9.50 1.18 Assume 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 intermediate calculations and round your final answers to 2 decimal places.) US Bancorp required return Praxair required return Eastman Kodak required return CAPM Constant-Growth Model % % % % % %

EBK CONTEMPORARY FINANCIAL MANAGEMENT
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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Bhupatbhai 

You have assigned the following values to these three firms: Upcoming Price Dividend Growth Beta US Bancorp $41.50 $2.55 9.80% 1.76 Praxair 78.80 1.28 16.50 2.83 Eastman Kodak 34.55 2.00 9.50 1.18 Assume 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 intermediate calculations and round your final answers to 2 decimal places.) US Bancorp required return Praxair required return Eastman Kodak required return CAPM Constant-Growth Model % % % % % %
Transcribed Image Text:You have assigned the following values to these three firms: Upcoming Price Dividend Growth Beta US Bancorp $41.50 $2.55 9.80% 1.76 Praxair 78.80 1.28 16.50 2.83 Eastman Kodak 34.55 2.00 9.50 1.18 Assume 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 intermediate calculations and round your final answers to 2 decimal places.) US Bancorp required return Praxair required return Eastman Kodak required return CAPM Constant-Growth Model % % % % % %
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