Using both capm and the constant-growth model

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Reference no: EM131962649

You have assigned the following values to these three firms:

Price Upcoming Dividend Growth Beta

US Bancorp $ 49.15 $ 3.70 7.60 % 1.85

Praxair 53.45 1.57 15.00 2.46

Eastman Kodak 14.85 1.00 7.50 0.94

Assume that the market portfolio will earn 10.60 percent and the risk-free rate is 3.00 percent.

Compute the required return for each company using both CAPM and the constant-growth model. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

CAPM Constant-growth model

US Bancorp required return % %

Praxair required return % %

Eastman Kodak requirement return % %

Reference no: EM131962649

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