You have assigned the following values to these three firms: ...
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Accounting
You have assigned the following values to these three firms:
Price
Upcoming Dividend
Growth
Beta
US Bancorp
$
55.95
$
3.95
8.20
%
1.52
Praxair
49.30
1.10
13.50
1.73
Eastman Kodak
16.70
2.00
13.20
1.03
Assume that the market portfolio will earn 11.40 percent and the risk-free rate is 6.00 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
%
%
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