You have assigned the following values to these three firms Upcoming Dividend $0.50 1.58 2.00 Estee Lauder Kinco Realty Nordstrom Price $36.00 75.00 11.00 Estee Lauder required return Kimco Realty required return Nordstrom required return CAPM Growth % % % 11.40% Assume that the market portfolio will earn 17.20 percent and the risk-free rate is 8.20 perce company using both CAPM and the constant-growth model. (Do not round intermediate ca to 2 decimal places.) 17.00 8.80 Beta 0.92 1.28 1.24 Constant-Growth Model % % %
You have assigned the following values to these three firms Upcoming Dividend $0.50 1.58 2.00 Estee Lauder Kinco Realty Nordstrom Price $36.00 75.00 11.00 Estee Lauder required return Kimco Realty required return Nordstrom required return CAPM Growth % % % 11.40% Assume that the market portfolio will earn 17.20 percent and the risk-free rate is 8.20 perce company using both CAPM and the constant-growth model. (Do not round intermediate ca to 2 decimal places.) 17.00 8.80 Beta 0.92 1.28 1.24 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 $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 % % %
Transcribed Image Text:You have assigned the following values to these three firms:
Upcoming
Dividend
$0.50
1.58
2.00
Estee Lauder
Kinco Realty
Nordstrom
Price
$36.00
75.00
11.00
Estee Lauder required return
Kimco Realty required return
Nordstrom required return
CAPM
Growth
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.)
%
%
%
11.40%
17.00
8.80
Beta
0.92
1.28
1.24
Constant-Growth
Model
%
%
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