FIN 315 - 05 Business Finance 2020 Fall Homework: Chapter 07 Homework Save Score: 0 of 1 pt

FIN 315 - 05 Business Finance 2020 Fall Homework: Chapter 07 Homework Score: O of 1 pt P7-23 (similar to) 10 of 10 (5 complete) HW Score: 50%, 5 of 10 pts Question Help IntegrativeRisk and valuation Giant Enterprises' stock has a required retum of 15.7%. The company, which plans to pay a dividend of $2.15 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. Ifthe risk-free rate is 6%, 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. Ifthe risk-free rate is 6%, the risk premium on Giant's stock is OYO. (Round to one decimal place.) Enter your answer in the answer box and then click Check Answer. Clear All Check Answer remaining