6.Gurley Enterprises' stock has a required return of 15.40%. The company, which plans to pay a dividend of $2.85 per share in 2019, anticipates that its future dividends will increase at an annual rate consistent with that experienced over the 2012-2018 period, when the following dividends were paid:

Year

Div per Shr

2012

$1.65

2013

$1.95

2014

$2.20

2015

$2.33

2016

$2.44

2017

$2.60

2018

$2.65

1.If the risk-free rate is 5%, what is the risk premium on Gurley's stock?

2.Using the constant-growth model, estimate the value of Gurley's stock.