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dividends will increase at an annual rate consistent with that experienced over 2 0 1 3 - 2 0 1 9 period, when the following
dividends will increase at an annual rate consistent with that experienced over period, when the following dividends were paid:
a If the riskfree rate is what is the risk premium on Giant's stock?
b Using the constantgrowth 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 riskfree rate is the risk premium on Giant's stock is
Round to one decimal place.
b Using the constantgrowth model, the value of Giant's stock is $Round to the nearest cent.
c Explain what effect, if any, a decrease in the risk premium would have on the value of Giant's stock. Select from the dropdown menus.
A decrease in the risk premium would
the required rate of return, which in turn would
the price of the stock.
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