Integrative-Risk and valuation Giant Enterprises' stock has a required return of 12.4%. The company, which plans to pay

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Integrative Risk And Valuation Giant Enterprises Stock Has A Required Return Of 12 4 The Company Which Plans To Pay 1 (69.06 KiB) Viewed 55 times

Integrative-Risk and valuation Giant Enterprises' stock has a required return of 12.4%. The company, which plans to pay a dividend of $2.08 per share in the coming year, anticipates that its future dividends will increase at an annual rate consistent with that experienced over 2013-2019 period, when the following dividends were paid: a. If the risk-free rate is 4%, what is the risk premium on Giant's stock? b. Using the constant-growth model, estimate the value of Giant's stock. (Hint: Round the computed dividend growth rate to the nearest whole percent.) c. Explain what effect, if any, a decrease in the risk premium would have on the value of Giant's stock. a. If the risk-free rate is 4%, the risk premium on Giant's stock is %. (Round to one decimal place.) Х Data table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Year 2019 2018 2017 2016 2015 2014 2013 Dividend per Share $1.96 $1.85 $1.75 $1.65 $1.55 $1.47 $1.38 Print Done